India's Coinsecure reports $3m worth of bitcoin theft

The central bank last week banned regulated entities from providing services to crypto users

Coinsecure said its one of its employees may have had a role to play in the heist. (AP Photo/Rick Bowmer, File)

One of India’s biggest cryptocurrency trading platforms has lost about 438 Bitcoins worth some 190 million rupees ($3 million), allegedly due to a rogue employee.

An official at Delhi-based Coinsecure was extracting Bitcoin to distribute to customers and he claims the funds were lost in the process, parent company Secure Bitcoin Traders said in a statement posted on Coinsecure’s website late Thursday. The system wasn’t hacked or compromised, it said.

“Our Bitcoin funds have been exposed and seemed to have been siphoned out to an address that is outside our control,” the company said. The firm is working toward recovering the money and “we reassure all our customers that you will be indemnified from our personal funds,” it said.

Coinsecure’s efforts may be hampered by India’s intensified crackdown on cryptocurrencies even as global prices rebound. The Reserve Bank of India last week banned regulated entities from providing services to users, holders and traders of cryptocurrencies.

“The RBI says they don’t recognise cryptocurrencies, nor does the government,” said Karnika Seth, head of corporate and cyber laws practice at Delhi-based Seth Associates. “So the whole locus of Coinsecure can be affected in this case. Their own bonafides will need to be scrutinised.”

_____

Read more:

How the world’s governments are handling cryptocurrencies

'It was fun but I would never do it again’: UAE Bitcoin investors confess

Rookie crypto investors are ignoring the risks

_____

Coinsecure said its employee Amitabh Saxena may have had a role to play in the heist. Its parent company has filed a complaint with local police and asked authorities to bar Saxena from leaving the country until the probe is completed.

Saxena couldn’t immediately be reached for comment when tried through Coinsecure. The company’s director Mohit Kalra -- who signed on the complaint -- couldn’t be reached on his mobile phone Friday.

Bitcoin has climbed about 18 per cent this month and was trading at $8,077 as of 9:24 a.m. in London. Pantera Capital Management, one of the biggest cryptocurrency hedge funds, says $6,500 was the low of this bear market and Bitcoin will stay above that price for the majority of the next year, likely surpassing the previous record of almost $20,000.

India’s Finance Ministry says virtual currencies aren’t legal tender and have no “regulatory permission or protection.”