Bitcoin Plunges Due to South Korean Cyber-Heist

Over the past weekend, South Korean cryptocurrency exchange Coinrail announced they were hacked – causing a plunge in the value of bitcoin and digital currencies for the market globally.

Bitcoin’s price went down more than 7% after the announcement. Coinrail revealed it had suffered a security breach losing approximately 30% of its digital currencies in a statement on Monday. The theft included other cryptocurrencies within the exchange that weren’t bitcoin. The company suspended trading in digital currencies and they are working with investigators to find the stolen funds.

Due to the news, bitcoin as well as prices on other common cryptocurrencies like Ethereum have also dropped in value. About $30 billion in cryptocurrency was wiped out in seven hours of trading according to data provider Coinmarketcap.com.

This year Coinrail hasn’t been the only one to get hacked. Japan’s Coincheck said hackers stole $530 million worth of virtual currency from their cryptocurrency exchange in the biggest cyberheist on record this January. The Wall Street Journal reported US investigators were demanding bitcoin exchanges to hand over trading data as part of a probe into potential manipulations of future markets. Tokyo-based Mt. Gox, who handle 80% of world’s bitcoin trades, filed for bankruptcy after losing bitcoin worth approximately half a billion dollars in 2014. Another South Korean cryptocurrency exchange Youbit recently shut down after being hacked twice.

Bitcoin was trading for $6,890.88 down 10.8% from Friday falling 65% from its all-time peak in December. With the lack of regularatory oversight, global policy makers warned investors to be cautious in trading. Fourteen major local cryptocurrency exchanges adopted more security measures to protect users in January by restricting a user to one account. Korea Internet & Security Agency are investigating with police and found only four of the country’s largest exchanges fulfill an Information Security Management System certification requirement. This certification protects personal information at companies with daily visitors averaging at 1 million.

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