Bithumb, one of South Korea`s biggest cryptocurrency exchanges has become perhaps the most recent victim of cryptocurrency theft. In a post on the company`s website, it admitted that “some cryptocurrencies worth about 35 billion won were seized between late yesterday and early Monday.”
Bithumb, reputed for being the sixth busiest exchange in the world as ranked by Coinmarketcap.com stated that it had taken measures to have all client assets stored in “safe cold wallets” and that these wallets function on platforms which aren`t directly linked to the internet. It assured customers of its readiness and commitment to offer them full compensation.
A renowned professor at Korea University`s Blockchain Research Institute and a blockchain expert, In Ho has reportedly stated that “since coins in the cold wallets are not at all wired to the internet, it would have been impossible for hackers to steal those in cold wallets unless they physically broke in.” He is of the view that the cryptocurrencies hackers made away with were most likely stored in ‘hot wallets’ – that which he considers insecure.
Mun Chong-hyun, chief analyst for ESTsecurity has stated that the era where digital currencies are constantly targeted by hackers is nowhere near ending. “No security measures or regulations can 100% guarantee safety of virtual coins. It is held anonymously and in lightly secured systems, which makes them an irresistible target,” Mun noted.
According to Coinmarketcap.com, Bithumb trades more than 37 different virtual coins. According to CoinDesk`s bitcoin price index, bitcoin`s price plummeted from about $6,718.35 to as low as $6,561.79, shortly after Bithumb tweeted about having lost $ 31.5 million worth of cryptocurrencies to hackers. A recovery in bitcoin’s price was however observed. Records show that at 10:03 a.m. HK/SIN, bitcoin traded at $6,614.46. The price of ethereum also fell from levels near $535 to as low as $521.07 prior to experiencing a bit of recovery, according to CoinDesk`s price index.
Recently, ethereum and bitcoin experienced price increases which analysts attributed to some assertions made by an official of the U. S. Securities and Exchange Commission (SEC) to the effect that neither of these digital currencies are securities. SEC also noted that many initial coin offerings (ICOs) could be rightly classified as securities and as such are bound by regulations that govern securities in the U. S.
Less than two weeks ago – June 11, another hacking incident was recorded, this time involving Conrail, also a South Korean exchange company. Much earlier this year, it was reported that a Japanese exchange Coincheck had lost more than half a billion dollars worth of cryptocurrencies to hackers. It appears hackers have had a field day for quite a while now.
In a move to curb incidences of money-laundering and other crimes involving the use of cryptocurrencies, South Korea imposed a ban on the use of anonymous bank accounts for digital currency transactions in January this year. Reports however indicate that the South Korean government has no plans to shut down cryptocurrency exchanges that operate within the country.
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Image from Reuters.