Bitcoin Plunges After Hackers Steal Potentially $40 Million

The price of bitcoin plummeted on Sunday after Coinrail, a South Korean cryptocurrency exchange, disclosed it was hacked.

해킹공격시도로 인한 시스템 점검중입니다. 일부코인(펀디엑스,NPXS)이 확인되었으며 추가적인 코인피해가 있는지 여부를 확인중입니다. 추후 자세한 사항은 재공지하겠습니다 / There has been an cyber intrusion in our system. We're confirming it and some coins(Pundi X, NPXS) are confirmed.

— coinrail (@Coinrail_Korea) June 10, 2018

As a result of the disclosure, the price of bitcoin, the leading cryptocurrency, declined more than 10% to hit a two-month low below $6,700, according to data from CoinDesk.

Since the start of this year, bitcoin’s value has more than halved. Its price had reached a high of close to $20,000 at the end of last year and dropped to less than $6,000 at one point in February. Other cryptocurrencies also felt the pain over the weekend with Ethereum, ripple and bitcoin cash all declining more than 10%. (See more: Google Searches for 'Bitcoin' Down 75%.)

Coinrail Token Loss Could Be Close to $40 Million

Coinrail, South Korea's seventh-largest exchange, called the incident a “cyber intrusion” and said it lost around 30% of the coins traded on its exchange. While the company wouldn’t disclose the value of the missing tokens, local media outlet Yonhap pegged the value at around $37.28 million, reported Reuters. Coinrail noted that 70% of the tokens have now been moved to a so-called cold wallet or one that isn’t connected to the Internet and that it is working with authorities to find the missing tokens. It's not clear how the hack happened and who is behind it. According to Korea Herald, the frozen tokens are Pundi X(NPXS), Aston(ATX) and Nper (NPER). (See also: Hackers Have Stolen $1.1B in Crypto This Year)

Coinrail is tiny compared to the other cryptocurrency exchanges, but it isn’t alone in being the target of hackers. With South Korea being a hotbed for cryptocurrency trading, it has been prone to scams and hacks, prompting authorities in the country to step up regulation of the digital token market. Reuters noted that in January 14 major cryptocurrency exchanges in South Korea embraced new measures that are designed to protect users including limiting account openings by individuals. (See more: SEC Chair Says Bitcoin Is Not A Security.)

Cryptocurrency Exchange Hacks

The hacking of cryptocurrency exchanges has become a worldwide problem with Japan’s Coincheck disclosing an attack in January and BitGrail, an Italian exchange, being hacked in February. In December of 2017, Youbit of South Korea was forced to close up shop and file for bankruptcy after being hacked two times. In 2014, Mt. Gox, the Tokyo exchange which at the time handled the majority of bitcoin trades, filed for bankruptcy after losing hundreds of millions of dollars in tokens. The Wall Street Journal noted that since 2014, investors have lost $1.4 billion to cryptocurrency exchange hacks.

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