Bitcoin traders received a shocking announcement: one of the major Bitcoin exchanges, Bitfinex, disclosed the theft of approximately 120,000 BTC. Details of the hack were not unveiled as investigations are still ongoing.

It is official, Zane Tackett a representative of Bitfinex disclosed the hack of the Exchange’s security systems, and revealed that more than $60 million were stolen. The digital assets platform interrupted its services, showing a notification about the hack instead.

As we account for individualized customer losses, we may need to settle open margin positions, associated financing, and/or collateral affected by the breach. Any settlements will be at the current market prices as of 18:00 UTC.

Bitfinex will now have to close all open margin positions to be able to make exact calculations about the real amount of funds deposited. Many users reported that, despite the fact that they were using Double factor authentication (F2A), their funds got compromised. Even more troubling, Bitfinex uses a “secure” multi-signature wallet, provided by BitGo.

A multi-signature wallet is a mechanism in which 2 signatures of 3 are needed to perform operations with Bitfinex’s funds. Under this system, one of the keys is held by BitGo, and the other two by Bitfinex –of which one of them is typically kept offline in a secure location in case of emergency. Apparently, the hacker managed to gain one of Bitfinex’s keys and found a way to make BitGo sign the transactions (effectively gathering the 2 needed signatures).

The announcement came in the middle of a bear market movement, which made Bitcoin test the $600 area.

According to the data provided by BitcoinWisdom (and taken from Bitstamp Market) Bitcoin plummeted to $465 making a quick recovery to the $500 area. Bitcoin holders should be aware of the current market volatility. If you have your funds in a third-party service remember: your coins aren’t really yours unless you control the private keys.

Update 1: Zane Tackett has confirmed that ETH and ETC funds remain safe.

Update 2: Bitfinex hasn’t decided yet how to handle the losses:

We are evaluating all of our options for addressing customer losses. At this time we don’t have any details that we can share on this, nor have we made any decisions regarding this. But i’ll be sure to keep everyone updates as more details on this become available.

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