Hackers are having a field day with the cryptocurrency market. Another South Korean cryptocurrency exchange has now been hacked. This time, it was Bithumb, which is based in the South Korean capital of Seoul. More than $30 million worth of cryptocurrency tokens has been stolen. This comes hot off the heels of the Coinrail hack that happened recently.
Bithumb grinds to a halt after the hack
The exact amount the hackers got away with, as reported by Bithumb, is $31.56 million. This comes out to approximately 35 billion won, which is the local currency. As a safety measure, the cryptocurrency exchange has stopped all deposits and withdrawals until the situation is under control. The exchange has also issued a statement saying that it would compensate all customers who lost part or all of their funds.
As with the Coinrail hack, the cryptocurrency market as a whole has suffered from this hacking incident. Right after the hack was reported, the value of Bitcoin fell by 2% down to $6,600. This is a continuation of the very bad year 2018 has been for Bitcoin, as well as other cryptocurrencies like Ethereum and Ripple. Bitcoin has not been able to progress much since its all-time 2018 low in February.
Cybersecurity expert says hacks are part of the cryptocurrency market
Wall Street Journal interviewed Yo Kwon, who is the the head of a cybersecurity firm specializing in blockchain projects. Kwon mentioned that cryptocurrency exchanges being hacked is bad for the industry as a whole. However, he also pointed out that because the hacks happen so frequently, it has pretty much become part and parcel of trading in cryptocurrency.
The reason why this hack is a bit different than the other is that Bithumb is one of the biggest exchanges in the world. As a matter of fact, it was the exchange with the highest trading volume this time last year. South Korea is, despite their tough regulation of cryptocurrency, the global leader in cryptocurrency exchange. Bithumb recently lost its top position to another South Korean cryptocurrency exchange called Upbit.
Hacking remains a huge problem in the cryptocurrency space
Altogether, cryptocurrency traders and investors have collectively lost more than $1.4 billion due to hacks over the past four years. Fortunately, there are organizations working on reducing the number of attacks. The Asia Securities Industry & Financial Markets Association (ASIFMA) is one of the organizations that have laid out a series of best practices for cryptocurrency exchanges.
ASIFMA reported that the “lack of due diligence and independent insight” were the main reason the hackers could gain access to the cryptocurrency exchanges. Because the industry as a whole is relatively young, many exchanges lack the experience it takes to prevent these kinds of hacks.Hopefully, as the market matures, these kinks will be ironed out.
What do you think can be done about the hacking incidents? And why are cryptocurrency exchanges especially vulnerable compared to other digital organizations? Leave your comments in the section below!