DO YOU WONDER WHY BITCOIN DROPPED? HERE’S WHY
After the abrupt drop of Bitcoin was widely reported in the media, many investors in the US are selling off their Bitcoins. For close observers of the Bitcoin market, drops and peaks are normal occurrences, but this is different. While many Bitcoin traders are hurriedly selling their coins, others keep wondering why Bitcoins and the altcoins dropped sharply.
Coinrail leaks its wounds
If you are one of those wondering why cryptos plummeted over the weekend, well, here is why: Coinrail, a South Korean cryptocurrency exchange, was hacked last weekend. The well-coordinated cyber-attack left the exchange with a humongous loss of roughly US$500 worth of Bitcoin in ONE HOUR.
Aside from the first cryptocurrency, Bitcoin, other coins, such as Pundi X and NPXS, were also lost to the attackers. Consequently, the exchange lost about 30% of its entire coins, but they refused to state in the fiat currency equivalent. But a local news agency estimated that the exchange could have lost roughly $US40 billion worth of digital coins.
Coinrail tweeted that they had lost some coins due to cyber intrusion, ending speculations that it was a mere rumor. In another statement, they also disclosed that about 70% of their cryptos are safe and have been moved to a cold wallet (which is not connected to the Internet).
Likely Causes
Breaches on exchanges always leave them counting huge losses. Crypto experts believe that cyber intrusion on exchanges is a pointer to the fact that many of them lack topnotch security architecture. And in some climes, there are weak system regulations, exposing the exchanges to attacks. Experts believe that these reasons could have led to the successful attack on Coinrail. Naeem Aslam, a crypto expert with ThinkMarkets, holds the view that exchanges are easy preys to cyber crimes where there is weak security architecture and that regulators must step in to protect the consumers.
Global Impact
South Korea is not just home to the busiest crypto exchange in the world, Bithumb, it is also one of the biggest virtual currencies trading centers in the world. The impact was felt all over the world, given that the crypto market is a speculative one. This is not the first time the Asian country’s crypto exchange has been hard hit by crypto attackers. It would be recalled that in December 2017, a South Korean exchange, Youbit, was attacked twice, compelling the exchange to shut down and file for bankruptcy.
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