Coinrail hack shook the cryptocurrency market. The South Korean currency exchange Coinrail reported that it was hacked last weekend, causing a sharp drop in bitcoin amid new fears about security on virtual currency exchanges, as world politicians tried to regulate the digital assets trade.
About $40 million were stolen
In a statement on its website on Monday, Coinrail reported that on Sunday its system was hit by a “cyber invasion”, which resulted in the loss of about 30 per cent of the coins traded on the exchange. News Yonhap reported that about 40 billion won ($ 37.28 million) of virtual coins were stolen.
Coinrail hack, a relatively small South Korean crypto exchange, sent the price of bitcoins to two-month lows, as it once again highlighted security risks and weak regulation of global cryptocurrency markets.
South Korea is one of the largest centres of cryptocurrency trade in the world and is home to one of the largest crypto exchanges, Bithumb.
Coinrail hack. The cryptocurrency market is in shock
On Bitstamp bitcoin last time traded at around 6 790.88 US dollars, which is 10.8 per cent less than on Friday, falling by about 65 per cent from the record peak in mid-December 2017.
Coinrail hack affected not only Bitcoin but also other cryptocurrencies, driving the entire market in red.
Investors and regulators were shocked earlier this year after the Japanese Coincheck exchange was breached as a result of a high-profile digital currency stealing for more than half a billion dollars.
Insufficiently monitor security?
In South Korea, 14 major local crypto exchanges took measures to improve the protection of users in January this year, including restrictions on the creation of more than one account.
Coinrail said that the balance of 70 percent of virtual coins is now safe in the “cold wallet”, which runs on platforms that are not directly connected to the Internet. It did not immediately become clear whether the lost coins were kept in a more insecure “hot purse”.
The Korea Internet and Security Agency, which is currently investigating with the police, said that only four of the country’s largest exchanges are subject to the requirements of ISMS certification.
ISMS is a system that certifies the protection of personal information from companies with an average daily visitor of more than 1 million.
“Coinrail, as of June this year, hasn’t been certified with the ISMS, as it isn’t mandatory (for the organization to do so),” the local regulator said in a statement.
Coinrail confirmed in its statement that the exchange is fully cooperating with the police investigation of the hacking and that the trade is now suspended.
Coinrail was the 98th largest crypto voltaic exchange, which trades more than 50 different virtual coins, according to Coinmarketcap.com
A successful year for hackers
According to the CryptoAware report, the total loss of the cryptocurrency market from hack and scam in the period 2011-2018 is $ 2.3 billion. And it is also noteworthy that the worst year of cryptocurrency losses regarding stolen assets was 2018.