South Korea has earned a reputation for being one of the world`s major digital currency trading hubs and happens to host Bithumb, reputed to be a large and very busy coin exchange – indeed one of the busiest in the world today. Sadly however, the country has recorded a couple of cyber attacks on some cryptocurrency exchanges. Something untoward happened over the weekend that has sent shock waves down the spine of many and which has had a negative impact on the digital market globally.
The price of Bitcoin and other digital currencies have plummeted, following the hacking of Coinrail, a South Korean cryptocurrency exchange over the weekend. Conrail tweeted yesterday confirming the hacking incident. This instigated a whopping 10% drop in the price of Bitcoin, apparently the lowest drop in two months.
In just an hour, Bitcoin reportedly lost as much as $500, plunging to $6,627 on the Luxembourg exchange Bitstamp. As earlier noted, several other digital currencies recorded significant loses.
Conrail released a statement on its website indicating that its system was compromised; a “cyber intrusion” yesterday resulted in the loss of about 30% of coins traded on the exchange.
The statement did not disclose the value (as in its quantification) of the losses incurred. Reports however suggest that a local news agency – Yonhap estimated the value of the coins lost stands at a mind boggling 40 billion won (£27.8m). This is enough to cripple many companies.
Coinrail said: “Seventy percent of total coin and token reserves have been confirmed to be safely stored and moved to a cold wallet [not connected to the internet]. Two-thirds of stolen cryptocurrencies were withdrawn or frozen in partnership with related exchanges and coin companies. For the rest, we are looking into it with an investigative agency, related exchanges and coin developers.”
According to the Korea Herald, investigations have been initiated by the Korean police. A spokesperson for the police is cited to have made this admission: “We secured the access history of Conrail servers and we are in the process of analyzing them.”
This recent cyber attack is simply one too many and brings to the fore the security lapses and the non-existence of ‘water-tight’ regulations of the crytocurrency industry across the globe.
In recent months, the world has witnessed a series of hacking incidences targeting cryptocurrency exchanges. In January this year, Coincheck, an exchange in Japan was hacked. Hackers made away with more then $500m-worth of digital currency. This has resulted in the company being hauled before the law courts even though it commenced re-reimbursing customers in March. Youbit, a South Korean exchange was hacked on two occasions. The company eventually filed for bankruptcy in December, 2017.
At ThinkMarkets, an online trading platform, Naeem Aslam did a good job at dissecting the problem and proffered a viable solution when he noted : “The question is: is there any limit to these hacks? After every few months, we are seeing the same pattern emerging. This is the result of loose regulatory control and regulators must step in to protect the consumers. Anyone who wants to do anything with exchanges should be forced to adopt high-grade security and regular security upgrades.”
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Images from Fortune.com, Coinweez