South Korean Crypto Exchange Robbed of $31 Million

Banking, finance, and taxes

Published: June 20, 2018 8:10 am

Last Updated: January 11, 2020 10:08 pm

Bithumb, one of South Korea’s largest cryptocurrency exchanges, stopped taking deposits and allowing withdrawals following the theft of 35 billion won (about $31 million) between late Tuesday and early Wednesday morning. According to CoinMarketCap, Bithumb is the world’s sixth-largest cryptocurrency exchange, with 24-hour trading volume valued this morning at over $393 million.

Bithumb’s remaining assets have been moved to a so-called cold-wallet, an external storage device that is not connected to the internet. The exchange stated that it will pay back victims of the theft from its own funds.

The theft is believed to have targeted Ripple’s XRP token. XRP is the world’s third-largest cryptocurrency, and Bithumb trades about 10% of global daily XRP volume.

South Korean authorities who are investigating the theft and Bithumb itself have revealed little about the nature of the attack, but a report at CoinDesk cites a report from Korean news bureau Yonhap that said malicious emails sent to Bithumb users earlier this month contained links that, if clicked, enabled the thieves to obtain Bithumb user account information and, ultimately, their electronic wallets.

The impact on cryptocurrencies was immediate once Bithumb announced the theft. Bitcoin prices dropped about 2%. Bitcoin for June delivery traded at $6,620 Wednesday morning and bitcoin for July delivery traded at $6,630. Just ahead of Bithumb’s announcement, July bitcoin traded at around $6,755.

This attack on Bithumb is the second in less than two weeks against a South Korean exchange. In the previous attack, a breach of Conrail resulted in the theft of an estimated $40 million worth of cryptocurrencies. An attack last year on another South Korean exchange, Youbit, resulted in that firm’s bankruptcy filing.