South Korean cryptocurrency exchange Bithumb is the latest victim in the recent increase in hacking attempts. Hackers stole 35 million won ($32 million) from the exchange “between late yesterday and early morning today” (19th-20th June). Bithumb has suspended all transactions and has advised users to refrain from depositing cryptocurrencies into its wallet address.
[Notice for the temporary suspension of the deposits]
Due to the increasing safety issues, we are changing our wallet system.
Please do not deposit until we notify.
*All deposits are not deposited into your wallet until all changes are completed.
Reuters reported that Bithumb clarified that all assets were stored in a cold wallet. They also told users that they will reimburse funds as soon as possible.
*All deposit and withdrawal service will be stopped to make sure the security. We will keep notice you of the restart of the service. We apologize for your inconvenience and thanks for your understanding.
— Bithumb (@BithumbOfficial) June 20, 2018
People are questioning whether the stolen funds were kept in a hot wallet, since it is impossible to hack cold wallets. Hot wallets are connected to the Internet while cold wallets are not. Cold wallets tend to be in the form of hardware – some of the famous wallets include Nano Ledger S, Trezor and KeepKey.
ESTsecurity’s chief analyst, Mun Chong-hyun, said, “No security measures or regulations can 100 percent guarantee safety of virtual coins. It is held anonymously and in lightly-secured systems, which makes them an irresistible target.”
Thiis is the second South Korean exchange that has been hacked this month. On Jun 11th, Coinrail lost one-third of its cryptocurrencies, worth $40 million, in a hacking incident. The event led to a sudden decline in the prices of all cryptocurrencies, according to Coinmarketcap.
At the time of writing, all the top 10 cryptocurrencies are in the red. Within 24 hours, Bitcoin has dropped by 1.1%, Ripple by 1.66%, Litecoin by 1.9% and IOTA by 3.74%. Yesterday, TRON was trending upward by 11% and today the number has dropped to 3%. Analysts expect prices to drop further, similar to how they did after Coinrail’s hack, since Bithumb is the sixth largest crypto exchange in the world.
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