South Korean Crypto Exchange Loses Millions in a Cyber Attack

South Korean Crypto Exchange Loses Millions in a Cyber Attack

In a statement tweeted through their official account, South Korean crypto exchange Coinrail confirmed that they were the victim of cyber attack. The exchange lost around $37 M to the hack.

On their official, Coinrail said that the cyber attack on Sunday resulted in a loss for around 30% of the coins. There

was a drop in the prices of all major cryptocurrencies after the news. On Monday morning, Bitcoin lost 6.81% of its value to trade at $6,987, according to major South Korean exchange Bithumb. Following the news, Ethereum also dropped 9.14% in value to reach $529.54 and Ripple lost 9.34% of its value to trade at $0.59.

About 20% of the stolen digital currencies were stolen through coin companies and related exchanges, according to Coinrail. The exchange has launched an investigation into the remaining 10% as well. Commenting on the status of the other 70% coins, Coinrail assured traders that “70 percent of total coin and token reserves have been confirmed to be safely stored and moved to a cold wallet” (a wallet that is inaccessible through the internet).

Police have started investigating the matter as well. According to a police spokesperson, the police has access to Coinrail’s servers and it’s analyzing then, reported the Korea Herald.

There have been a number of cyber-attacks targeted towards cryptocurrency exchanges in recent months. Last year, South Korean exchange Youbit went bankrupt after multiple hacking attacks. In January this year, Japanese exchange Coincheck lost over $500 million to a hacking of their exchange. In 2014, major Japan-based exchange Mt. Gox went bankrupt after losing half a billion dollars in Bitcoins.

Bitcoin was showing signs of recovery during the past week, with consistent daily buy volumes. Bitcoin is currently trading at $6,769, a – 4.60% change in the past 24 hours, according to CoinMarketCap. Other main cryptocurrencies are also showing negative numbers: Ethereum (-5.84%) and Ripple (-5.38%).

Coinrail is one of the minor South Korean exchanges. The cryptocurrency landscape in the country is dominated by Bithumb, Korbit, and UPbit. The Coinrail website is currently down for maintenance.

Commenting on Coinrail, Korea Blockchain Industry Association representative Kim Jin-Hwa said “Coinrail is not a member of the group that promotes self regulations to enhance security. It is a minor player in the market and I can see how such small exchanges with lower standards on security level can be exposed to more risks.”

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