Bitcoin price drops as South Korean exchange Bithumb loses $32m in crypto-heist

The price of Bitcoin is on the slide today after the South Korean cryptocurrency exchange Bithumb said $31.5 million worth of virtual coins were stolen by hackers.

In a notice posted on its website on Wednesday that it had stopped all trading and stored ‘all clients’ assets in safe cold wallets’ which are stored on platforms not directly connected to the internet.

It was the second local exchange targeted in just over a week as cyber thieves exposed the high risks of trading the digital dosh.

Bithumb said it would fully compensate customers.

The Bithumb theft highlights the security risks and the weak regulation of global cryptocurrency markets. Global policymakers have warned investors to be cautious in trading the digital currency given the lack of rules and regulations governing it.

Bitcoin symbol in front of a green binary code on a acrylic mirror

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.’

‘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,’ said In, a blockchain expert at the research centre.

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Bithumb’s statement did not say whether the stolen coins were stored in its ‘hot wallets’.

Mun Chong-hyun, chief analyst at ESTsecurity, said digital coins would continue to be juicy targets for hackers around the world.

‘No security measures or regulations can 100 percent guarantee safety of virtual coins. It is held anonymously and in lightly-secured systems, which makes them an irresistible target,’ Mun said.

A chart showing the price of Bitcoin over the past month (Graphic: Coindesk)

One Bitcoin is now worth about $6,636 after dropping from a high of $6,773 yesterday.

It has fallen roughly 70 percent from its all-time peak hit around mid-December 2017.

On June 11, another South Korean cryptocurrency exchange Coinrail also said it was hacked. The cyber attacks come after a high-profile theft of over half a billion dollars worth of digital currency at Japan’s exchange Coincheck earlier this year.

In January, South Korea banned the use of anonymous bank accounts for virtual coin trading to stop cryptocurrencies being used in money laundering and other crimes. But the government said it does not intend to go as far as shutting down domestic exchanges.

Bithumb trades more than 37 different virtual coins.


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