Bithumb: Hackers ‘rob crypto-exchange of $32m’

This article from the BBC. NEP’s Bill Black has warned about these issues…

A leading crypto-coin exchange has halted trade after declaring that hackers had stolen some of the digital currencies it stored.

Seoul-based Bithumb said that 35bn won (£24m; $31.6m) worth of cyber-cash had been “seized” overnight, adding that it would fully compensate affected customers.

The values of Bitcoin, Ethereum and Ripple all fell on the news.

It is the second time in less than a year that Bithumb has been breached.

Last July, it acknowledged an employee’s PC had been hacked – exposing users’ personal details.

South Korea’s spy agency later accused North Korea of being responsible after the stolen information was used to carry out scams.

Cold wallet

Bithumb notified a local regulator – the Korea Internet and Security Agency – of the latest attack, shortly before alerting the public via social media.

“Some crypto-currencies valued [at] about $30m was stolen,” it posted in a since deleted tweet.

In subsequent posts – which are still online – it added:

“All deposit and withdrawal services will be stopped to make sure [of our] security… We are providing compensation… Bithumb urgently asks our valuable customers not to deposit any funds into Bithumb wallet addresses for the time being.”

The firm provided a Google-shortened link with further information, but it appears to have been blocked by the search firm for unspecified reasons.

An earlier post on Bithumb’s Twitter account reveals that it had announced that a database upgrade was being carried out as part of a security update late last week. It added that it had transferred assets to a “cold wallet” – a term used to refer to external storage unconnected to the internet – as part of the process.

However, it is unclear whether this is linked to the reported theft.

The Yonhap news agency has reported that police officers have launched an investigation and collected records from computers at the company’s headquarters.

The incident comes just over a week after another South Korean crypto-currency exchange, Coinrail, reported that it had been the victim of a separate attack in which hackers had stolen 40bn won worth of virtual coins.

Bithumb is, however, the bigger of the two operations, and represents the world’s sixth busiest crypto-cash trading platform, according to the news site Coindesk.

At the time of writing, one bitcoin was trading at $6,626.19 (£5,035) – representing a 1.4% drop from its level before news of the heist spread.

2 Responses to Bithumb: Hackers ‘rob crypto-exchange of $32m’

  1. I find it an interesting comment that affected customers would be fully compensated. Just precisely, how can an “exchange” be in a position to create the stolen “invisible and imaginary” funds? And that also raises the question as to what extent a, supposedly, independent “exchange” can manipulate the price when they seem to be in a position to create those “invisible and imaginary” funds at will? It seems this whole cryptocurrency phase is nothing more than an enormous pyramid scheme that depends on enticing customers” to buy into the fraud. What seldom seems to be mentioned is that every cryptocurrency is actually worthless unless it can be measured and ultimately exchanged for legal tender in whatever denomination. And that applies to any trade in cryptocurrencies – the product or asset must first be valued in legal tender, and as far as I know, very few, if any, bank will accept cryptocurrencies to pay off a mortgage.

    • madame defarge

      well, I am reading your comment and the same thing could be said about the transition from gold and silver to paper…