South Korean Cryptocurrency Exchange Loses $37 Million In Cyberattack, Bitcoin Price Drops Shortly After
South Korean cryptocurrency exchange Coinrail suffered from a cyberattack over the weekend, likely sending the price of bitcoin tumbling. Bitcoin value dropped 10 percent on Sunday shortly after the exchange broke the news on Twitter.
Per a report from The Guardian, the popular virtual currency dropped to $6,627 on the Luxembourg exchange Bitstamp. Prices of other cryptocurrency, like Ethereum and Ripple, fell dramatically as well.
According to a statement issued by Coinrail, their system was struck by a “cyber intrusion.” Roughly 30 percent of altcoins traded on the exchange were stolen, a loss of an estimated 40 billion won ($37.1 million).
“Seventy percent of total coin and token reserves have been confirmed to be safely stored and moved to a cold wallet [not connected to the internet],” wrote Conrail in a statement about the exchange cyberattack. “Two-thirds of stolen cryptocurrencies were withdrawn or frozen in partnership with related exchanges and coin companies. For the rest, we are looking into it with an investigative agency, related exchanges and coin developers.”
South Korean police have obtained access to Conrail’s servers and are currently investigating the hack, per a Korean Herald report. As of yet, investigators are not entirely sure the loss of cryptocurrency was a hack or a computer network issue. Government officials with the Korea Internet & Security Agency (KISA) are also involved in the investigation.
“We began the investigation immediately after receiving reports from the company. It may take around a month to accurately figure out the causes,” said a KISA spokesperson.
Bitcoin plunges 12% to a 2-month low and cryptocurrencies lose $42 BILLION after hackers target the South Korean exchange Coinrail https://t.co/Fg4BLUqnCR
— Daily Mail Online (@MailOnline) June 11, 2018
Attacks on cryptocurrency exchanges continue to plague investors and call into question current security measures to protect systems from hackers. In January, Coincheck, an exchange based in Japan, was hit by cyberhackers and over $500 million in virtual currency was stolen. Another South Korean exchange, Youbit, was shut down in December after two cyberattacks essentially ruined the platform.
“This is the result of loose regulatory control and regulators must step in to protect the consumers,” said Naeem Aslam of ThinkMarkets, an online trading company. “Anyone who wants to do anything with exchanges should be forced to adopt high-grade security and regular security upgrades.”
On Monday afternoon, bitcoin was trading at $6,750, significantly lower than the $20,000 peak it saw in late December. Cryptocurrency investors cannot say with certainty why bitcoin’s price has dropped over the past two days as the world’s best known virtual currency was not one stolen in the Coinrail cyberattack.