A Lesson in Sharing Private Keys

The cryptocurrency exchange, ironically named CoinSecure was forced to halt their operations when it was discovered over 430 BTC had been stolen. CoinSecure is a company located in Delphi, India, where the price of Bitcoin relative to the average wage is exponentially greater than the common first world nation. We should consider the magnitude of that difference when evaluating the extent to which this company has failed its customers and shareholders.

First, CoinSecure held all of their client’s Bitcoin in one wallet. Second, the company gave the full private key to two executives. They did not even bother cryptographically dividing the key or dividing their funds across multiple wallets. The company is accusing their chief science officer, Dr. Amitabh Saxena of steeling the Bitcoin. The CSO initially reported the missing funds and could not provide an explanation for possible attack vectors. The CSO was one of two executives who had access the the private key.

It is most likely, the stolen Bitcoin will never be recovered. In the last report issued by CoinSecure, the funds have been transfered to the following address: 1BaEJquitskdXcTj53Uy6PuUtJ5a8ETWpA.

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