Bithumb hacked, $30 million lost, trading suspended, markets drop

Posted: 20 June 2018 1:17 pm

Customers will get their money back, but the markets aren't happy and conspiracy theories are flowing.

In brief:

  • The Bithumb exchange has been hacked.
  • $30 million of customer cryptocurrency was stolen.
  • The exchange moved all customer funds to cold storage for security, and suspended trading.
  • All affected customers will be reimbursed.

In context

After a solid day in the green, it appears that news of the hack has caused a sudden downshift in prices. This might seem like an oversized response for a loss of "only" $30 million, but Bithumb is one of Korea's larger and more highly regarded exchanges, so this successful hack suggests that there might be similar security issues elsewhere.

At the same time, Korea is one of the more cryptocurrency-enthusiastic countries, and crypto news tends to travel fast on the peninsula. A quick and unpleasant market response to a large Korean exchange hack can probably be expected.

Bithumb also responded quickly and took immediate action to secure its remaining funds, and investigate the issue.

Cryptocurrency exchange hacks and attacks are frequent enough that a PR playbook has started to emerge, and Bithumb seems to be making all the right moves by clearly and promptly communicating the issue, letting customers know the extent of the problem, and whether they should be worried about losing or can expect reimbursement.

That hasn't stopped the semi-serious conspiracy theories, though. It might be a sign of the times that some people's first thought is that the exchange pretended to hack itself while shorting cryptocurrency elsewhere.

Other conspiracy theorists are considerably more conspiratorial.

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC, NANO

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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