After $31 million hack, crypto exchange Bithumb halts withdrawals

Inside a cryptocurrency mine in South Korea

Inside a cryptocurrency mine in South Korea

Bithumb exchange was hacked losing $32m in cryptocurrencies. Although Bithumb still hasn't revealed which cryptocurrencies were affected by this hack, they assured that all the losses from the theft will be reimbursed from the reserves of the exchange. "It is not that we cannot see which "wallet" these "coins" have been transferred into but rather that the stolen tokens can be transformed into "fresh" tokens by using "mixing services", which create new untraceable tokens", he explained.

The decline was probably mitigated due to the prompt response of Bithumb and their confirmation that they would cover the losses from their funds.

Chris Moon at cyber security firm SK Infosec said, "The cryptocurrency exchanges themselves know they are vulnerable to hacking attacks if they store cyber money in online servers".

In a notice posted on its website on Wednesday that it had stopped all trading and stored "all clients" assets in safe cold wallets' which are stored on platforms not directly connected to the internet. South Korea's Coinrail exchange was the target of the last attack, and shortly after the value of Bitcoin plummeted downward into the mid-$6,000 range.

It is also the second time a leading South Korean exchange has been compromised this month, following that of Coinrail on June 10, demonstrating fundamental security flaws in the current cryptocurrency trading system. Currently, Bithumb is the world's sixth largest exchange by trade volume, which has halted all type of transactions on the platform-deposits and withdrawals.

The exchange stated the amounts will be refunded, and it has removed all other assets to cold wallet storage.

Numerous trading and exchange sites have been criticized for paying less attention to security measures, a vulnerability that exposes them to hacking. However, the hackers have stolen worth $30 million worth of currencies via getting hands-on to an opened hot wallet.

At press time, Bitcoin is valued at $6,759, after gaiing 1.22 percent in the last 24 hours.

In order to explain the price recovery of Bitcoin, Magical Crypto Friends' Chikun has pointed to the good news coming from the Tether affair, whose audit appears to go well and without major incidents.

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