Major cryptocurrency exchange Bithumb halts trading after more than $31 million hack


Bithumb, South Korea's second-largest exchange, said cyberattacks from late Tuesday night to Wednesday morning led to the loss of 35bn won worth of cryptocurrencies. Coinrail was only the 99th most popular exchange in terms of trade volume, but Bithumb has always been in the top 10 exchanges, and the most used exchange in South Korea.

A statement from Bithumb gave no details on how hackers penetrated the system, which is among the top sites for cryptocurrency trading. The prices of Bitcoin, Ethereum, and Ripple - three popular cryptocurrencies - all fell when the news was announced. "However, this loss will be compensated by Bithumb's own reservoir, and all of our assets are securely saved in Bithumb's cold wallet".

A South Korean Bitcoin exchange has fallen victim to a cyber-robbery for the second time in less than a year. The firm also added that all user assets are now being stored in "safe cold wallets" that are not directly connected to the internet. He said: It's not the first time a cryptocurrency exchange is being hacked and users losing assets worth millions of dollars.

At this point in time, Bithumb is rank ed 6 and is one of the largest exchanges in the world.

Prior to the most recent attack, Bithumb had agreed to pay authorities $28 million in backdated taxes - something which initially caused suspicion among commentators when it became known hackers had stolen a similar amount.

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Bithumb's blog post reads "Due to security issues; we are changing our system regarding deposits of cryptocurrency".

In Ho, a professor at Korea University's Blockchain Research Institute, said the stolen coins were most likely to be from the more insecure 'hot wallets'.

The news will continue to serve as a warning to investors of the risks involved in putting money into the nascent cryptocurrency market. Bithumb has annual profits of around $300 million, so the Bithumb hack shouldn't threaten their long-term survival. Coinrail lost US$28 million (~RM112 million) in the attack.

It's fascinating how thousands of cryptocurrencies store their funds in third-party custodial wallets, which have been proved vulnerable by a series of hacks in last few years.