Content, Asia Pacific, Breach, Channel markets

$30 Billion Erased from Cryptocurrency Value in South Korean Exchange Heist

Cyber gangsters have stolen about 30 percent of the virtual currency of a below-the-radar South Korean exchange.

The June 10 heist, which hit the Coinrail exchange, reverberated throughout the volatile cryptocurrency markets, quickly erasing some $30 billion from the trading value of bitcoin and other digital currencies, according to reports citing data from Bitcoin’s trading price sunk to $6,750, down more than 7 percent to nearly its lowest value in two months and about half of where it stood six months ago, CNN Money reported.

Coinrail, in a statement posted Monday on the web, confirmed the theft but did not detail the value of the stolen tokens. The exchange said it had temporarily suspended virtual currency trading and is fully cooperating with authorities.

“At present, 70% of your coin rail total coin/token reserves have been confirmed to be safely stored and moved to a cold wallet and are in storage,” Coinrail said. “About 80% of coins that have been confirmed to be leaked have been frozen/withdrawn/redeemed or equivalent, in consultation with their co-workers and related exchanges, while the remainder are under investigation with investigators, related exchanges and coin developers.”

Exchange officials said they are still assessing the amount of damage and may require “some time to be taken with the coin,” to not interfere with the investigation. Further transactions and withdrawals will resume after the service is stabilized, the outfit said, which apologized twice for the episode and vowed to resolve it quickly.

Regulators in the U.S. and in Asia appear to be looking more closely at cryptocurrency markets. Late last week, word surfaced that U.S. government regulators have told several bitcoin exchanges to hand over trading data as part of an investigation into possible exploitation of futures markets, the Wall Street Journal reported.

And, following the early February hack of $530 million worth of cryptocurrency from the Tokyo-based Coincheck exchange in one of the largest thefts ever recorded, Japanese financial regulators temporarily suspended operations at exchanges Bitstation and FSHO and reprimanded five others, including Coincheck, for lax cyber security.

D. Howard Kass

D. Howard Kass is a contributing editor to MSSP Alert. He brings a career in journalism and market research to the role. He has served as CRN News Editor, Dataquest Channel Analyst, and West Coast Senior Contributing Editor at Channelnomics. As the CEO of The Viewpoint Group, he led groundbreaking market research.