The operators of the world's sixth-biggest cryptocurrency exchange, South Korea’s Bithumb, announced Monday that they’d been hacked and more than $30 million in digital coins stolen. That was just over a week after another South Korean exchange lost $40 million — and yet the bitcoin market barely blinked.
While previous hacks of this size have caused the price to plummet, on Monday the price of bitcoin barely moved.
According to Coindesk’s price index, the price dropped around $160 to $6,562 before bouncing back to $6,652 an hour later.
Previously, news of exchanges being hacked and bitcoin being stolen has had a much bigger impact on the price of the world’s largest cryptocurrency.
Back in March, the price of bitcoin plummeted by as much as $1,000 after it was revealed that the world’s largest exchange, Binance, had been hacked.
The company was already aware of potential threats, conducting security checks in recent days, saying: “Recently, the number of unauthorized access attempts has increased. As such, an urgent server checkup was conducted to strengthen the security of all system.”
The checkup didn’t work however, and on Wednesday the company suspended all deposits and withdrawals.
Regulators in Korea are already investigating the attack, and the company said it would refund all lost coins to its customers from its own coffers.
Wednesday’s hack is the second reported by the company in the space of a year. Last year the company reported that 30,000 customers account had been compromised.
Last week it was revealed that Coinrail, a much smaller exchange also based in Seoul, had been hacked with $40 million worth of digital coins stolen.
In total over the past 14 months in South Korea alone, cryptocurrency exchanges have lost almost $90 million worth of currency, with authorities saying few customers have received compensation.
Bithumb’s decision to repay all the money stolen from customers has been welcomed by those in the industry who want to move away from cryptocurrency’s shadier aspects.
This could be an indication of why the price of bitcoin hasn't dropped further on the back of this attack — the industry is getting better at dealing with the fallout from hacks.
“Bitcoin's high level of transparency makes it easier for authorities and businesses to track any illicit activity or stolen goods and eventually return them to their rightful owner,” Mati Greenspan, a market analyst with eToro, told VICE News. “Very likely, we'll continue to see more emphasis and development around security and the trusted custody of cryptocurrencies and that's ultimately a good thing for the industry.”
But authorities in South Korea need to ensure that exchanges still need to do more to protect their customers, one expert warned.
“Local exchanges have quite poor security systems in place,” Kim Seung Joo, a professor at Seoul's Korea University, told Yonhap. “It is imperative for the government to have a clear definition related to the matter and create legal boundaries.”
Cover image: A man watches the prices of bitcoin at Bithumb cryptocurrency exchange in Seoul, South Korea, Wednesday, June 20, 2018. (AP Photo/Ahn Young-joon)