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Not so “encrypted” cryptocurrency

Cryptocurrency has been the buzzword recently, but exactly how safe it is ?

Cryptocurrency has been the buzzword recently, with Bitcoin, Etherum, Ripple have all suddenly became the darlings of financial investors.

The buzz surrounding the cryptocurrency pointed to the meteoric rise of Bitcoin from valuation of around USD950 in January 2017, to jump nearly 20 times to USD19,200 in December 2017.

With huge amount of profits made at such a short period of time, the cryptocurrency has also attracted unwanted attentions as well.

 

South Korea’s cryptocurrency exchange hacked

Bithumb, South Korea’s largest cryptocurrency exchange was hacked and personal information of around 30,000 of its customers were believed to be stolen. The culprit was fingered as North Korean hacking sources, according to South Korea’s National Intelligence Service (NIS) or simply the country’s spy agency.

Apparently, the attack dated back to February by targeting one of Bithumb employee’s home PC. Subsequently, the employee only found out in June, that its home PC has become a victim of hackers. Since then, the hackers have demanded a payment of USD 5.5 million from Bithumb in exchange for the deleting of traders’ personal information.

In addition, it was estimated that around USD 7 million of digital money was stolen by the hackers as well which may surge in valuation to USD 82.7 million by now.

According to NIS, Bithumb was not the only exchange targeted by hackers, another exchange, Coinis was on the hackers’ crosshair as well and had its system breached in September 2017.

Then, the South Korea’s spy agency had also identified second “trademark” North Korea’s hacking attack on Coinis in October 2017. However, the second attack was reportedly thwarted based on the local media reports.

 

One third of trading platforms hacked: U.S. Homeland Security

South Korea is not alone in these cryptocurrency exchanges breaches. As a study funded by the U.S. Department of Homeland Security indicated that nearly one third of the bitcoin trading platforms had been hacked since the creation of bitcoin from 2009 to 2015 period. Following the hack, almost half of the bitcoin trading platforms were forced to close within the first six years.

Moreover, one of the biggest heist occurred at Tokyo’s MtGox exchange in early 2014, where around USD350 million values in bitcoins were pickpocketed by the hackers. It was heard that two years after the attack, many investors had yet to recover their deposits lost to the hacking.

 

Verdict

As the saying goes, “no risks, no gains”, cryptocurrency market being a new market does come with its own set of risks, and offers high return as well. The anonymity nature of the cryptocurrency has also made its perfect target for hackers, especially among the big exchanges where huge amount of cryptocurrency were stored.

Regulating and policing of this industry are still in its infancy and may need more time for the various authorities to plan and implement them to mitigate the cryptocurrency risk effectively.

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