Bithumb Cryptocurrency Exchange Hacked, $31 Million Of Tokens Stolen, All Services Suspended

In the second such case in two weeks in South Korea, cryptocurrency exchange Bithumb was hacked into and a large amount of tokens stolen from its servers. The company made the announcement on its website Wednesday morning, saying it was suspending all services till further notice.

The total value of crypto tokens that were stolen was about 35 billion won (roughly $31.5 million). Bithumb said it would cover any losses suffered by its customers, and that all assets were being transferred to a cold wallet, which refers to storing them offline. Keeping them away from the internet ensures they can’t be stolen, even if the company’s servers were still vulnerable.

The hack took place sometime between late night Tuesday and early morning Wednesday (South Korean time), according to Bithumb’s statement, which did not specify the exact cryptocurrencies affected.

A couple of social media posts the company made on its official Facebook and Twitter accounts have since been deleted, but they mentioned a value of $30 million, and the fact that the company would cover the stolen cryptocurrencies, along with announcing the stoppage of all deposit and withdrawal services.

Another post that appeared on both those accounts soon after the deleted messages again urged the company’s “valuable customers” to not make any deposits into their Bithumb wallets, and provided a link to the company’s statement.

Somewhat curiously, just before Bithumb announced the news of the hack, it posted a notice on its social media accounts, temporarily suspending deposits into its wallet while it changed its wallet system “due to the increasing safety issues.” The hacking news came minutes later.

The company apologized for the inconvenience to its customers, and said it was making all efforts to restart full operations as soon as possible.

Charlie Lee, the creator of litecoin cryptocurrency, referred to this incident on his own Twitter page and offered advice to crypto investors on how to stay safe.

Even if Bithumb is covering any losses made by its customers, the news still doesn’t bode well for cryptocurrencies in general, coming as the hack did just 10 days after another South Korean exchange, Coinrail, said it had been hacked into. While it didn’t provide exact value of the theft, estimates put it down to about $40 million.

Almost immediately after the news broke, the price of bitcoin fell by almost $200, or 3-4 percent, losing some of the gains it had made over the course of the past week. Other popular cryptocurrencies, like ethereum and litecoin, also fell between 2 and 4 percent in the aftermath of the Bithumb hack. However, given the general high volatility in prices of crypto assets, those changes are not very remarkable.

Bithumb, which is among the world’s largest crypto exchanges by trading volume, was also hacked in July 2017 when over $1 million worth of cryptocurrencies was stolen.