Almost 120,000 bitcoin worth around $78m has been stolen from Hong Kong-based Bitfinex, one of the most popular cryptocurrency exchanges, causing a 20% drop in the value of the currency.

The hack, which is the largest of its kind and limited to bitcoin wallets held by the company, forced Bitfinex to cease trading and report the theft to law enforcement, the company said in a statement on its website.

Bitfinex said in a statement on its website: “We are investigating the breach to determine what happened, but we 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.”

Zane Tackett, director of community and product development for Bitfinex, said: “The [119,756 bitcoin] was stolen from users’ segregated wallets.”

The value of bitcoin plunged nearly 20% on the news, according to data from CoinDesk. The 120,000 bitcoin account for around 0.75% of all bitcoin in circulation.

Antony Lewis, a bitcoin expert in Singapore, said: “It’s the biggest USD exchange, so outside China it’s the one that everyone has an account with. It’s very liquid, folk can trade on margin, lots of daily volume.”

It is not yet clear whether the theft was an inside job or whether hackers were able to gain access to the system externally.

It is also unknown whether the theft will force Bitfinex into bankruptcy. A similar loss of bitcoin from the then biggest exchange MtGox forced it into bankruptcy protection in 2014 and the arrest of its chief executive Mark Karpeles in Japan.