Bitcoin exchange in South Korea has gone bust after hack

by Julie Splinters - -

A bitcoin exchange based in South Korea has gone bust after being hacked. The hack reveals the risk of attempts to take advantage and profit of 2017’s peak in digital currencies.

Youbit exchange hack

South Korean Youbit based in Seoul allows its customers to trade digital currencies.  However, it filed for bankruptcy due to the cybercriminals’ attack. During this attack, almost all of its customers’ holdings was stolen.[1]

Due to bankruptcy, the settlement of cash and coins will be carried out in accordance with all bankruptcy procedures. However, in order to minimize the damage to our members, we will arrange for the withdrawal of approximately 75 percent of the balance at 4:00 a.m. on Dec 19. The rest of the unpaid portion will be paid after the final settlement is completed. We will do our best to minimize the loss of our members by 17 percent, through various methods such as cyber comprehensive insurance (3 billion [won]) and selling the operating rights of the company.

It is worth to mention that Youbit has experienced these kinds of hacks before. In April this year, cybercriminals stole 38 billion ($35 million) in digital currencies.

However, the company does not know any circumstances about the attack, including how much currency thieves have stolen.

Youbit is not the only digital currency trading platform that has come under attack.[2]

The digital currency platform Nicehash was also attacked and hackers kidnapped over $70 million worth of bitcoins. Bitfinex, a Honk Kong-based digital currency exchange was also shut down – cybercriminals stole over $60 million worth bitcoins.

The director of threat intelligence at FireEye, Tim Wellsmore indicated that bitcoin exchanges decreased because of security issues and risks caused by attackers.

“As the prices of bitcoin and similar virtual currencies continue to appreciate, we expect greater interest from attackers seeking to steal it.” 

Bitcoin’s worth is about 15 times higher than it was at the beginning of 2017.

South Korean institutes have alleged North Korean-based attackers for targeting various cryptocurrency exchanges in 2017.

Digital currencies do not fall under central bank control and they are not regulated. Because of this anonymity which Bitcoin offers, it attracts a high volume of cybercriminals.[3]

At the moment, South Korea is able to account for about one-fifth of worldwide trading in the digital currency.

Bitcoin is also in high demand in the country, thus traders can possibly end up paying from 15% to 20% more than anywhere else. Youbit is a relatively small company in the industry and is dominated by Bithumb.

 

 
 

About the author

Julie Splinters
Julie Splinters - VPN service analyst

Julie Splinters is a VPN service analyst at Reviewedbypro.com, who specializes in VPN services and anti-spyware applications. Her major of English Philology and her passion for IT helped her choose the path of an IT writer.

Contact Julie Splinters
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