Another hacked cryptocurrency exchange has sent a wave of the infamous trifecta of fear, uncertainty, and doubt through the cryptosphere yet again. After news broke about the South Korean cryptocurrency exchange Coinrail being hacked, the market quickly went into a tailspin.
A Saturday tweet by Coinrail alerted users of the security breach and simultaneously caused the market to crash, with Bitcoin shedding $500 in just an hour.
“System checkup due to attempted hacking attack. Some coins (Pundy x, NPXS) have been confirmed and are being checked for additional coin damage. Further details will be reposted”
Coinrail admitted that about 30% of the coins traded on the exchange have been stolen, and the South Korean news agency Yonhap is reporting the total value of the lost coins to be worth over 40 billion won or 37 million US Dollars.
South Korean police launched an official investigation into the hack and theft and have the cooperation of Coinrail. In regards to the safety of remaining coins and whether recovery was possible, the exchange said, that 70% “of total coin and token reserves have been confirmed to be safely stored and moved to a cold wallet. Two-thirds of stolen cryptocurrencies were withdrawn or frozen in partnership with related exchanges and coin companies. For the rest, we are looking into it with an investigative agency, related exchanges and coin developers.”
A hack like this perfectly exemplifies the argument made by doubters of the technology. Investors are driven away by security threats, and the fact that millions or even billions can be lost in blink of an eye is not a comforting sentiment. This isn’t the first time a cryptocurrency exchange has been hacked and robbed of millions. It’s not even the first time in South Korea. The exchange YouBit was breached in January, losing 17% of its digital assets. The $500 million hack and heist of Japanese crypto exchange Coincheck also occurred in January causing a sharp 20% drop in Bitcoin and perhaps acted as the harbinger of the bear market that has taken strong hold in past months.
Even in the midst of bad news, many cryptocurrency experts and enthusiasts urge people to hold on to their positions, and even buy more during these crashes. However, many of the same people were banking on May’s Consensus 2018 conference, which was held in New York City, to be the catalyst for a bull run, but it never materialized.
While blockchain is a promising technology and its potential use-cases exciting, cryptocurrency remains volatile.
Writer, producer, cryptocurrency enthusiast.