On Sunday, hackers stole 30% of the digital currency stored in the cyber vault of South Korean exchange platform Coinrail. While hardly a rare or record breaking occurrence, the effect of this heist on the crypto market has been dramatic; Bitcoin are down 10%, while the overall crypto market cap fell below $300 billion.
A cyber heist on a lesser-known cryptocurrency exchange appears to be the catalyst for billions of dollars being wiped off the value of Bitcoin, and the digital currency market in general. The price of Bitcoin dropped by 10% upon the news that Coinrail, a south Korean crypto exchange company, had suffered a major security breach, resulting in hackers stealing 30% of its virtual currencies, none of which were Bitcoin.
However, a tweet from Coinrail confirming the attack was all it took to send investors panicking and Bitcoin and the crypto market hurtling toward two-month lows. Bitcoin’s BTC value – already precarious – fell by $500 in an hour, dropping to $6,627 on some exchanges, while most other cyber currencies took heavy hits also. For example Ethereum, the no.2 ranked crypto, dropped from $570 to $511.
So What Happened?
Coinrail say the hackers struck Sunday and removed a variety of different crypto coins including Pundi X (NPXS), a lesser known currency which accounts two thirds of Coinrail’s trading volume. It’s estimated that a total of 40 billion South Korean won ($37.2 million) worth of currency was stolen.
Coinrail is a relatively small exchange operation, handling $2.5 million in daily transactions. There is a belief that smaller, less wealthy exchanges will suffer from lower standards of security, and make for easier hacking targets. Although Coinrail have since stated that it has temporarily suspended all trading in cryptocurrencies, and that it was fully cooperating with investigators, it seemed like a case of “shutting the door after the horse has well and truly bolted.”
Fourth Major Crypto Exchange Hack Of 2018
The Coinrail incident marks the fourth time a crypto exchange has been heavily hacked in 2018.
- In January, $400 million worth of cryptocurrency was stolen from Coincheck. Although hit hard, the Japanese exchange had no option but to reimbursed all 260,000 of their customers who were victims of the hack.
- In February, 17 million coins of the crypto Nano – worth some $200 million – “went missing” from Italian exchange Bitgrail. Was it stolen by hackers or embezzled? The investigation is ongoing, but it’s Italy, so literally anything is possible.
- In April, cryptocurrency exchange Coinsecure said some $3.3 million worth of Bitcoin had been stolen from its main wallet, with a hack suspected. However, soon after, the CEO of Coinsecure, an Indian crypto exchange, was accusing his CSO of stealing 438 Bitcoin – the equivalent of $3.3 million — from the company’s main wallet. Was it a hack? Was it internal pilfering? Once again, the investigation is ongoing.