Bithumb Was Hacked: Massive Threat To Bitcoin Exchanges Worldwide

A year has not even passed since the last hackers’ attack on the South Korean crypto exchange Bithumb. This brings a lot of concern to the regulators and investors of the crypto world as major sums of money are being stolen. Let us see what happened and who is to blame?

The world was shocked by the tweet of famous crypto analyst Dovey Wan who reported on hacker attack. It was supposed that the cold wallet had been hacked where all the users’ funds are being held. Fortunately, as it was reported later it was an online ‘hot wallet’.

When the news filtered through, it was found out that EOS assets were moved by non-custodial ChangeNow crypto exchange. Dovey Wan posted a piece of evidence where we can see transactional logs. In total, about three million EOS were stolen.

Source: CCN

The stolen sum goes beyond EOS and includes 20 million XRP tokens, which equals $6 million.

Right now, Bithumb is re-allocating its funds from hot wallet to cold wallet to save the remaining assets, however, those being stolen are roaming around the web between exchanges. The transactional scheme is presented below.

Source: CCN

Bithumb exchange has already apologized for the inconvenience brought by the hack and supposed that insiders were involved in this accident. The official statement says:

 

“As a result of the internal inspection, it is judged that the incident is an ‘accident involving insiders’. Based on the facts, we are conducting intensive investigations with KISA, Cyber Police Agency and security companies.”

The South Korean exchanges have regrettably an alarming record of security hacks, embezzlement, frauds, starting from Yobit which was hacked in 2017 for two times. After reappearing as Coinbin within several months, it filed for bankruptcy as it could not manage the third hack worth of $26 million. Analysts are assured that a lack of security happened due to the embezzlement circled the company.

The positive thing is that most of the users’ funds are allocated at the cold wallets where hackers cannot access, however, the frequency of the hacker attacks on the South Korean exchange calls into a question the security and safety.

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