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Cryptocurrency hack: $31 million stolen in South Korea

South Korean cryptocurrency exchange- Bithumb said  $31.5 million worth of virtual coins were stolen by hackers. The second local exchange was targeted in just over a week as cyber thieves exposed the high risks of trading the digital asset.

Bithumb said in a notice on its website that it had stopped all trading after discovering “some cryptocurrencies worth about 35 billion won were seized between late yesterday and early morning today.”

The exchange is the sixth busiest in the world according to Coinmarketcap.com and said it had stored “all clients’ assets in safe cold wallets,” which operate on platforms that are not directly connected to the internet.

It added that the company would fully compensate customers.

The Bithumb theft puts light on the security risks and the weak regulation of global cryptocurrency markets. Global policymakers have warned investors now to be cautious in trading the digital currency given the lack of broad regulatory oversight.

“Since coins in the cold wallets are not at all wired to the internet, it would have been impossible for hackers to steal those in cold wallets unless they physically broke in,” said In, a blockchain expert at the research centre.

Bithumb did not immediately respond the request for comments, and its statement did not say whether the stolen coins were stored in its ‘hot wallets’ or not.

Mun Chong-Hyun, the chief analyst at EST security, said that all digital coins would continue to be juicy targets for hackers around the world.

“No security measures or regulations can 100 per cent guarantee safety of virtual coins. It is held anonymously and in lightly-secured systems, which makes them an irresistible target,” Mun said.

On the Luxembourg-based Bitstamp, bitcoin BTC=BTSP was down 1.8 per cent at $6,612.92 by 0351 GMT, elongating the loss as a series of intrusions on cryptocurrency exchanges in recent weeks sparked concerns over security.

It has fallen roughly around 70 per cent from its all-time peak hit around mid-December 2017.

On June 11, another South Korean cryptocurrency exchange Coinrail said it was hacked. The cyber attacks come after a high-profile theft of over half a billion dollars worth of digital currency at Japan’s exchange Coincheck earlier this year.

In January, South Korea banned the use of anonymous bank accounts for virtual coin trading to stop cryptocurrencies being used in money laundering and other crimes. But the government said it does not intend to go as far as shutting down domestic exchanges.

Bithumb trades more than 37 different virtual coins, according to Coinmarketcap.com

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