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South Korea’s Bithumb loses $31.5m in cryptocurrency heist

South Korea’s Bithumb loses $31.5m in cryptocurrency heist

The South Korean cryptocurrency exchange Bithumb said 35bn won ($31.5m) worth of virtual coins were stolen by hackers, the second local exchange targeted in just over a week as cyber thieves exposed the high risks of trading the digital asset.

Bithumb said in a notice on its website that it had stopped all trading after ascertaining “some cryptocurrencies worth about 35 billion won were seized between late yesterday and early morning today”.

The exchange, the sixth busiest in the world according to Coinmarketcap.com, said it had stored all clients’ assets in “safe cold wallets” – which operate on platforms not directly connected to the internet. It added that the company would fully compensate customers.

The Bithumb theft highlights the security risks and the weak regulation of global cryptocurrency markets. Global policymakers have warned investors to be cautious in trading the digital currency, given the lack of broad regulatory oversight.

In Ho, a professor at Korea University’s Blockchain Research Institute, said the stolen coins were most likely to be from the more insecure ’hot wallets’.

“Since coins in the cold wallets are not at all wired to the internet, it would have been impossible for hackers to steal those in cold wallets unless they physically broke in,” said In, a blockchain expert at the research centre.