'Our Bitcoin fund was exposed and appeared to be moved to an address outside our control,' the company said in a statement.
However, Coinsecure admits that the system has not been attacked by the network, and the exchange will pay its customers for compensation.
Mohit Kalra, the company's founder and CEO, told the local media that he suspects that Amitabh Saxena, the chief security officer of the exchange, was guarding theft. He was the only high-level executive who had the exchange's main wallet private key.
Kalra said: 'Private keys should not be exposed to the Internet. It looks like an internal crime. We have shared this suspicion with the online investigation department and contacted experts to search for the source of hacking and lost bitcoins.'
He added: 'Because the private key was kept by Amitabh Saxena, we felt he was involved in this matter. His passport should be detained to prevent him from fleeing overseas.'
Coinsecure claims to be India’s leading Bitcoin and cryptocurrency exchange. It claims to have detected unauthorized system intrusions on Monday. This incident caused about 438 Bitcoin to be stolen, worth US$3.5 million.
In the previous few days, the Indian Central Bank just decided to prohibit banks from working with cryptocurrency exchanges.