Leading bitcoin exchange Bitfinex (BTXNA, Inc.) has temporarily ceased trading after the company reported a security breach that led to the theft of a large number of bitcoins.

The amount believed to have been stolen is 119,756 bitcoin, which at the time of writing is valued at $65.6 million.

Bitfinex said in a blog post that they were investigating the breach to determine what had happened, but they “know that some of our users have had their bitcoins stolen.”

“We are undertaking a review to determine which users have been affected by the breach. While we conduct this initial investigation and secure our environment, bitfinex.com will be taken down and the maintenance page will be left up,” the company added.

The theft itself is said to have been reported to legal authorities.

Bitfinex added that going forward they may need to settle open margin position, associated financing, and/ or collateral affected by the breach as they account for individual customer losses, and that “Any settlements will be at the current market prices as of 18:00 UTC” of the day of the suspension of trading.

Price crash

As of a series of technical problems in early June, Bitfinex was the largest bitcoin exchange online by volume with trades on the exchange accounting for some 55 percent of daily global exchange volume.

Not surprisingly removing the largest bitcoin player from the market affected the price of bitcoin with the BTC/USD exchange rate dropping as much as 30 percent on the news to lows of $480 before recovering to $540.16 at the time of writing; in perspective the price of Bitcoin had been trading at $631 Monday morning.

Bitfinex may not be alone in driving market uncertainty however with Cryptocoinnews reporting that the price dive also coincided with a meeting between bitcoin miners and Bitcoin Core developers.

According to the report, which oddly ignores the Bitfinex hack:

The price drop may suggest that the market expects a continuation of the current status or it may be just a response to the current uncertainty of outcome as well as, perhaps, insider trading.

Whatever the reason for the price decline what is certain is that the bull run on the price of bitcoin is well and truly over with the bears coming to the forefront; the price may yet settle but ongoing uncertainty about scaling combined with the biggest hack since Mt. Gox does zero favors to the bitcoin market as a whole.

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