Hackers Shut Down South Korean Bitcoin Exchange

Youbit suffered the second attack with 17 percent of clients assets lost.

Hackers Shut Down South Korean Bitcoin Exchange

Youbit, the South Korean Bitcoin exchange has been hit by hackers for the second time in 8 months. The cryptocurrency exchange was hit back in April and lost nearly 4,000 Bitcoins, a value of almost $74 million at the current rate. As a result of the second hacking incident, the exchange has now decided to shut down.

The South Korean based exchange confirmed on the 17th of December that hackers had managed to leave with at least 17 percent of its total assets. Since there are no records of how much Bitcoin was in their hands, there is no way of knowing how much the hackers made out with. The company also announced that it was going to file for bankruptcy as a result.

In a statement to its customers, the firm apologized and posted that their customers’ assets would be marked down to 75 percent. Commenting on the hacking incident, High Tech Bridge CEO, Ilia Kolochenko, said that this was sad for Bitcoin as a whole. Compared to the banking system which has security guarantees and protection for its customers, Bitcoin had no safety guaranteed. The banking sector is heavily regulated, but Bitcoin would be difficult to recover funds since there is close to zero chance of being compensated. Kolochenko added that Bitcoin still remained vulnerable because of how the technology was intertwined in exchanges. On top of that, with the increase in the price of Bitcoin, more and more Bitcoin-related cybercrime should be expected, Kolochenko said.

Various reports indicated that the South Korean Internet and Security Agency (KISA), had started investigations of the attack. Kisa, which also investigated the first attack, believes the North Korean hacking group, Lazarus Group might be responsible. Kisa believes that the Lazarus Group was responsible for the first attack too. The group has been accused of launching attacks against several South Korean based crypto exchange services in the past few months. It is believed the group is part of North Korea’s campaign to raise foreign currency since the country is impoverished. The country is also under intensive sanctions from virtually every country in the world because of it’s nuclear policies. Lazarus Group is also believed to be involved in cyber espionage campaigns.

Cyber Resilience Lead at Positive.com, Leigh-Anne Galloway said that Bitcoin had a remarkable year hitting heights that many people did not expect. However, this has also seen an increase in attacks on the cryptocurrency system. Apart from Youbit, there have been numerous attacks on cryptocurrency wallets, ICOs and there were even attacks against the launch of new cryptocurrencies. Galloway added that as the market continues to expand and grow, people should expect more attacks. The industry will continue to become a target for cybercriminals as it now presents an opportunity to make quick money, and lots of it.