Crypto Exchange Bithumb Hacked, Loses $31.5M

Inside a cryptocurrency mine in South Korea

Inside a cryptocurrency mine in South Korea

"We checked that some of cryptocurrencies valued at about $30,000,000 were stolen". "Relying less on the security of the individual wallets and more on the underlying systems of the exchanges should lead to an improvement in overall security", Chappell said. While it is quite evident and the speculations reveal that the exchange has been victim to a robbery which incurred a loss of nearly $30 million to this Seoul-based exchange. Less than two weeks ago, Coinrail lost approximately $37.2 million worth of coins following a hacking attack. Meanwhile, Japanese cryptocurrency exchange Coincheck lost more than $500 million to hackers in January.

The exchange has put a stop to deposits and withdrawals and customers have asked to comply.

The first one was to give an announcement about temporarily stopping the service, on the premise that they are taking care of their security and evaluating the situation.

For now, Bithumb is moving the remainder of its funds into a cold wallet to avoid further risk.

Crypto-exchanges are used to trade in cryptocurrencies, but many have suffered major hacks and cyberattacks over the years.

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Bithumb said yesterday that it reported the theft to the Korea Internet & Security Agency and that officials there are investigating. The only inconvenience now will be the temporary pause of all the functionalities.

While the latest theft has weighed on sentiment, investor reactions have been relatively subdued, said Ryan Rabaglia, head trader at cryptocurrency dealing firm Octagon Strategy in Hong Kong.

The platform added that the stolen money will be covered by the exchange's reserves, and customer assets have been transferred to a cold wallet that stores cryptocurrencies in an offline environment that is not accessible via the internet. In clearer terms, Bithumb users will only be affected by the temporary suspension of service.

The company is now warning users to not deposit new funds into their accounts or attempt to make payments, as the transactions could be lost during the system migration. Historic performance is no guarantee of future returns.

Its price, which reacts to speculation and changes on a minute-to-minute basis, remains highly volatile.

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