Published: Mon, June 11, 2018
Business | By Kate Woods

Korean Cryptocurrency Exchange Coinrail Suffers $40 Million Theft

Korean Cryptocurrency Exchange Coinrail Suffers $40 Million Theft

The world's most valuable digital currency is now trading at $7,229 per coin, widening losses for the year to 48%.

A statement on the exchange's site sought to reassure users - saying that the remainder of the coins were "safely stored" - but Reuters reports that the value of Bitcoin tumbled to two-month lows in the hack's aftermath.

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Although the exact amount of the coins stolen was not specified, local news outlet Yonhap has suggested that the total value of stolen cryptocurrencies is estimated at $37.1 million.

"Two-thirds of stolen cryptocurrencies were withdrawn or frozen in partnership with related exchanges and coin companies". While the latest hacking target - a South Korean venue called Coinrail - is much smaller, the news triggered knee-jerk selling by investors, according to Stephen Innes, head of Asia Pacific trading at Oanda Corp in Singapore. In January 2018 some $500-worth of cryptocurrency was stolen as a result of a hack on Japan-based exchange Coincheck, which led to a severe drop in market prices for various digital currencies and toughening of the country's policies towards cryptocurrency exchanges. Popular cryptocurrency exchange, Bitfinex - infamous for its $68 million hack in 2016 - suffered a domain denial of service (DDoS) attack last week. "Coinrail said the balance 70 percent of virtual coins are now secure in its cold wallet, which operates on platforms not directly connected to the internet".

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Coinrail is not a member of the group that promotes self regulations to enhance security.

The statement also said the exchange is fully cooperating with a police investigation into the hacking, and that trading has been suspended for now. The company wasn't immediately available for further comments.

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Korea Internet & Security Agency, now carrying out the investigation with police, said only four of the country's largest exchanges are subject to the Information Security Management System certification (ISMS) requirement.

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