Bitcoin Plunges Following Hack of Coinrail

Coinrail, the cryptocurrency exchange based in South Korea said it had been hacked during the weekend, which sparked a steep drop in bitcoin amidst increased concerns over security at the many different virtual currency exchanges. At the same, time global lawmakers continue to struggle in their attempt to regulate the trading of the digital asset.

On Monday, in a prepared statement posted on its official website, Coinrail said that its system had been hit by an unauthorized cyber intrusion Sunday which resulted in a loss of 30% of the coins that were trades at Coinrail.

The value was not quantified by Coinrail, but in a report that was unsourced on Yonhap news, which is a local news agency, it was estimated that close to 40 billion won or $37.27 million worth of the cryptocurrency had been stolen.

The theft at Coinrail, which is a relatively small cryptocurrency exchange in South Korea, sent bitcoin prices tumbling to a low of two-months as it again underscored the security risks as well as the weak regulation of the markets that trade cryptocurrency.

South Korea has become one of the major trading centers in the world for cryptocurrency, and includes one of the virtual coin exchanges most heavily trafficked, Bithumb.

As of Monday following the news of the hack, Bitstamp bitcoin, based in Luxembourg was trading at $6,790.90, which was down 10.8% from its Friday close. The cryptocurrency has dropped in value by as much as 65% from its peak high of all-time that was reached in December of 2017.

Both investors as well as regulators were shocked earlier in 2018 after the Coincheck the cryptocurrency exchange based in Japan was hacked for more than $500 million of digital currency.

In 2014, Tokyo-based Mt. Gox, which at one time handled 80% of the bitcoin trades in the world, filed for bankruptcy protection after it lost bitcoins worth approximately half a billion dollars.

Of recent, in December of 2017, Youbit the cryptocurrency exchange in South Korea was shut down and it filed as well for bankruptcy protection after it was hacked on two separate occasions.

Global lawmakers have warned digital currency investors they need to be cautious with their trading given the overall lack of regulatory oversight.

In January of 2018, fourteen local cryptocurrency exchanges in South Korea adopted new measures that were aimed at protecting users better, including placing restrictions on creating over one account.