Crypto Exchange Bithumb Hacked, Loses $31.5M


Although Bithumb has yet to disclose which and how much cryptocurrency had been stolen, it said in the announcement that the loss will be covered by the platform.

The exchange stated the amounts will be refunded, and it has removed all other assets to cold wallet storage.

There's often uncertainty around alleged hacks, with some in the crypto community claiming an inside job for most incidents. Only a small portion of Bithumb's funds stored in its hot wallet has been stolen and the speedy response by the Bithumb team to move funds from its hot wallet to cold or offline wallet allowed the company to prevent a bigger theft.

Bithumb, one of the largest cryptocurrency exchanges in South Korea by trading volume, is halting deposit and withdrawal services after hackers stole 35 billion won ($31 million) from the platform.

"Due to the increasing safety issues, we are changing our wallet system", Bithumb said on Twitter. It also said that it would fully compensate all of its customers affected by the hack.

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The platform is the sixth-largest in the world, with an average daily trading volume of nearly $400 million, according to CoinMarketCap. The Coinrail hack coincided with a significant dip in the prices of cryptocurrencies, with Bitcoin losing $1,000 in a matter of hours.

Cryptocurrencies dropped after the second South Korean exchange in as many weeks said it was the victim of a theft, renewing fears about the security of digital-asset trading venues.

The values of Bitcoin, Ethereum and Ripple all fell on the news.

Bithumb has quickly established itself as one of the fastest-growing trading platforms in South Korea - a country that has become a major hub for cryptocurrency traders in recent months.

Before the Bithumb hack, the market appeared to be recovering as it gained more than $12 billion in total market capitalization.