South Korean exchange Bithumb hacked, cryptocurrency markets plunge

South Korea’s largest exchange Bithumb lost $31 million in a hack that occurred between late last night and early today morning. While rumours of the hack had been doing the rounds on Reddit from Tuesday evening itself, the exchange confirmed it in a post today. In the morning, the company had even tweeted about it, only to delete the post later.

This attack comes two weeks within a similar attack on another Korean exchange Coinrail which alleged that $40 million were lost in the hack. While Coinrail is a much smaller exchange, the attack on Bithumb has shaken the cryptocurrency investor community.

Bithumb users, though, have no cause for worry as the company has said that they will compensate for any losses. The exchange has halted all deposits and withdrawals until further notice. It has also urged users to not deposit any funds into their Bithumb wallets.

According to a report by Coindesk, Ripple (XRP) seems to be the most compromised cryptocurrency in the alleged hack. The exchange has also reported the matter to the Korea Internet & Security Agency (KISA), the government body which oversees internet and cybersecurity issues in the country. However, the extent and cause of the breach is still not unconfirmed.

Needless to add, the cryptocurrency market reacted negatively to the news and plunged by $10 billion. The Bitcoin price dipped to about $6,561 before recovering back to $6,662 at the time of writing. The trading volumes on Bithumb are still healthy at $406,463,551.

Conspiracy theories have also begun doing the rounds with many community members speculating that the hack had to do something with the $28 million tax bill that was slapped on Bithumb recently. While most hacks are suspicious, the truth will only emerge after the finer details of the breach come out.

This is again a strong reminder for all cryptocurrency investors to stop storing their cryptocurrencies on exchanges. You can keep a small amount on exchanges to facilitate trade but make it a practice to store your crypto assets in your own private wallets where you have access to the private key. It has a small learning curve but it will protect your digital wealth against from hacks. You never know – maybe your exchange is next on the hitlist!