B

ithumb is a South Korean based cryptocurrency exchange, and is one of the five biggest cryptocurrency exchanges in the world. With around 2.5 million users, is makes up 75% of South Korea’s bitcoin and 50% of Ethereum trading volume.

Bithumb is Estimated to Account for 10% of The World's Bitcoin Trading Yesterday, March 29, 2019, Bithumb has temporarily suspended all their withdrawals and deposits.

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">[Notice🔔] <br>We deeply apologize to our members for delaying the cryptocurrency deposit and withdrawal service, we would like to inform you of the circumstances of the grounds and confirm that your assets are safe. <br>For more details &gt;&gt; <a href="https://t.co/dOvT78P0sK">https://t.co/dOvT78P0sK</a></p>&mdash; Bithumb (@BithumbOfficial) <a href="https://twitter.com/BithumbOfficial/status/1111877947592310785?ref_src=twsrc%5Etfw">March 30, 2019</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

In the link attached to twitter they explained a detection of abnormal activities through their trading monitoring system. They went on to reassure the public that "all the spilled cryptocurrency is owned by company, and all the member's asset is under the protection of the cold wallet."

A cold wallet is a way of storing cryptocurrencies and digital assets without internet connection. They are under complete protection from hacks, unauthorized access, and exposure from the internet-connected wallets.

It is widely popular for wealthy investors because it is immune to frauds and hacks from exchange platforms. An Internal Inspection Indicates This "Hack" was a Inside Job Bithumb is now working with KISA (Korea Internet & Security Agency), Cyber Police Agency, and other security companies.

The exchange takes blame for the fact they "only focused  on defense of outside attack" and had a "lack of verification of internal staff."

$13 Million in the EOS Cryptocurrency Was Reported Stolen From The Exchange.

In a report from CoinDesk Korea, Bithumb believes their private key was stolen and a total of 13.07 million EOS was taken. The EOS tokens have been relocated to Huobi, HitBTC, KuCoin, Changelly, and more.

Image by Darwin Laganzon from Pixabay

The only address the stolen EOS was transferred to was also stated in the report. It is believed to be the hacker's address. According to Binance, EOS is currently trading at $4.22, hence making the total value lost just under $13 million.

The public isn't too pleased with this situation, and many came to twitter calling Bithumb untrustworthy and a scam.

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">[Notice🔔] <br>We deeply apologize to our members for delaying the cryptocurrency deposit and withdrawal service, we would like to inform you of the circumstances of the grounds and confirm that your assets are safe. <br>For more details &gt;&gt; <a href="https://t.co/dOvT78P0sK">https://t.co/dOvT78P0sK</a></p>&mdash; Bithumb (@BithumbOfficial) <a href="https://twitter.com/BithumbOfficial/status/1111877947592310785?ref_src=twsrc%5Etfw">March 30, 2019</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">[Notice🔔] <br>We deeply apologize to our members for delaying the cryptocurrency deposit and withdrawal service, we would like to inform you of the circumstances of the grounds and confirm that your assets are safe. <br>For more details &gt;&gt; <a href="https://t.co/dOvT78P0sK">https://t.co/dOvT78P0sK</a></p>&mdash; Bithumb (@BithumbOfficial) <a href="https://twitter.com/BithumbOfficial/status/1111877947592310785?ref_src=twsrc%5Etfw">March 30, 2019</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

This wasn't the first time Bitumb was hacked and the exchange's history isn't so clean as well. In June 2017, over 30,000 users personal information was stolen from a Bithumb employee's personal computer.

In January 2018, the exchange was raided by the Korean Government for alleged tax evasion. Another $32 million in digital currency was hacked and stolen in June 2018 as well.  Based on an article published by CoinTelegraph.

$14 million of the stolen digital assets was recovered 4 months after the attack.

Photo by sebastiaan stam on Unsplash

Keeping large amount of funds on online exchanges are generally a bad idea. Online exchanges, no matter how big, are prone to hacks and attracts many unnecessary risks. In 2018, $2.7 million in digital assets are stolen from exchanges on a daily basis.

Hackers will only continue to grow more intelligent and sophisticated.

Bithumb is not the first Exchange to get hacked, and probably won't be the last. Cold or Hardware wallets are the safest way to keep an investors money safe. It is not advised to use online exchanges for long term cryptocurrency storage.

Updated on
October 17, 2019
 in 
Security
 category

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