Bitcoin Dives Below $7,000 Extending Losses Following $40 Million Hack

Bitcoin extends losses following the hack of the South Korean crypto exchange Coinrail.

Bloomberg reports Bitcoin Tumbles Most in Three Months Amid South Korea Hack.

Bitcoin extended losses for a third day, tumbling 12 percent Sunday as South Korean cryptocurrency exchange Coinrail said there was a "cyber intrusion" in its system.

The largest cryptocurrency declined to $6,749 as of 2 p.m. in New York, the biggest drop since March 14, according to data compiled by Bloomberg from Bitstamp pricing. That widens Bitcoin’s losses for the year to 53 percent. Peer cryptocurrencies Ethereum and Ripple fell 11 percent and 12 percent, respectively.

Coinrail said in a statement on its website that it’s reviewing its system due to hacking attempts. The exchange says it has managed to freeze all exposed NPXS, NPER and ATX coins, and that other cryptocurrencies are now being kept in a cold wallet.

$40 Million Hack

Techcrunch reports Korean crypto exchange Coinrail loses over $40M in tokens following a hack

Another day, another crypto hack. This time it’s Korea, the crypto-mad Asian country, where an exchange called Coinrail lost more than $40 million in altcoins, ICO-issued tokens that aren’t bitcoin or Ethereum, after it was hit by an apparent attack over the weekend.

Most notably, the hackers got away with $19.5 million-worth of NPXS tokens that were issued by payment project Pundi X’s ICO. Added to that they scored a further $13.8 million from Aston X, an ICO project building a platform to decentralize documents, $5.8 million in tokens for Dent, a mobile data ICO, and over $1.1 million Tron, a much-hyped project originating from China.

In all the cases, the companies issuing the tokens themselves were not hacked, the tokens that were nabbed belong to Coinrail users.

Pundi was hit the hardest, claiming that some three percent of its total volume of tokens was impacted by this attack. It said it has frozen the tokens that were stolen and it has ceased trading of its tokens across all exchanges to help with the post-attack investigation, which it said includes the Korean police. NPER, which had around $860,000-worth of tokens taken from Coinrail, said it had frozen the stolen funds and it plans incinerate the tokens to render them useless to the hacker. Aston has also frozen its affected tokens, according to Coinrail.

For those of you keeping score on recent hacks on exchanges, here are a few: Coincheck lost an estimated $400 million earlier this year, last November saw Tether claim it lose $31 million following an attack while EtherDelta suspended its exchange service for a period in December after it was compromised.

The Mt. Gox hacking in 2014 is the mother of all crypto attacks, of course. In total the exchange lost around 744,408 BTC. That was worth around $350 million at the time, but today a holding of that size would be valued at some $5.3 billion.

Checking in WithCoinrailVia Google translation

Hello, this is coin rail.

On June 10, there was a system check due to the hacking attempt at dawn.

At present , 70% of your coin rail total coin / token reserves have been confirmed to be safely stored and moved to a cold wallet and are in storage.

Two-thirds of the coins confirmed to have been leaked are covered by freezing / recalling through consultation with each coach and related exchanges. The remaining one-third of coins are being investigated with investigators, relevant exchanges and coin developers.

Among the spilled coins, the token that has been completed is shown below.

• Fundus X (NPXS), Aston (ATX): Freeze

• Enper (NPER): Freeze and additional to be issued

All assets of CoinRail, which have not been leaked, are moved to a cold wallet and are kept safe, and transactions and withdrawals will resume after stabilizing the service. We will update the announcement when possible.

I will apologize for any inconvenience, and I will do my utmost to resolve it sooner. Once again, I sincerely apologize.

Thank you.

Coin rail dream

Following the attack, 70% of the coins are now safe in a cold (offline) wallet. Two-thirds of the 30% hack are frozen and perhaps recoverable.

Assuming recovery of two-thirds, the exposure to Coinrail is about $13.3 Million. I expect Coinrail will make whole on any losses.

Mike "Mish" Shedlock

Comments
No. 1-7
CJones
CJones

Your article also highlights another flaw in crypto "NPER ... plans [to] incinerate the tokens to render them useless to the hacker." So people are okay with an entity erasing your tokens/wealth with a key stroke? Not exactly a gold standard is it. They should all trade lower.

skiprob
skiprob

Computer trading with 1s and 0s has some significant downside. No intrinsic value that I can see unless done with some sort of asset backing. We don't know if the Korean hack is real but based on others, it very likely is. No nation-state really want competing monies so they will be pushing back very hard, especially those with small gold reserves per GDP. Even despite these problems, I think they are pretty cool. I can't wait to see who eventually comes out on top of this highly competitive industry. For me, I'm sticking with the Goldmoney model until we see all the volatility in foreign exchange rates go away.

Six000mileyear
Six000mileyear

Klepto-currency!

ReadyKilowatt
ReadyKilowatt

The lesson to be learned (again) is to only use exchanges for transactions, not for storage. These things ain't exactly Fidelity.com.

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