Earlier this week, one of South Korea’s largest cryptocurrency exchanges, Bithumb, was hacked for a now confirmed 35 billion won worth of cryptocurrencies, equivalent to $31.5 million. The hack made headlines, caused the cryptocurrency market to drop $10 billion in value, and has since caused quite a stir in South Korea, prompting the South Korean Ministry of Science and Technology to launch an investigation into the hack and other crypto exchanges to get involved in preventing the stolen funds from being laundered.
South Korean Ministry of Science and Technology Launches Probe
According to local South Korean media outlet Yonhap, the Ministry plans to look into the cause of the theft, and is working closely with police, authorities, and other agencies. The Ministry has been diligently investigating the security of 21 different crypto exchanges starting in Q1 of 2018, and has confirmed that most have dangerous security flaws, as proven by Bithumb’s hack.
The Ministry notes that they discovered a complete absence of a security system in at least 12 of the exchanges it investigated. The rest suffer from poor monitoring systems, weak security, and overall inadequate technology.
Crypto Exchanges Showing Support to Bithumb
Thanks to blockchain’s immutable ledger, the stolen cryptocurrencies can be tracked and could potentially be prevented from being sold on other exchanges. According to Bithumb, it believes it can reduce the amount of damage by working with other exchanges to potentially retrieve the stolen funds. It claims that the total damages “are expected to be lower” in the future.
The Bithumb team released the following statement:
“After the incident occurred on June 20, Bithumb quickly followed the procedure to immediately report [the] incident to KISA announcing that about 35 billion Korean Won worth amount of cryptocurrency was stolen. However, as we undergo recovery process on each cryptocurrency, the overall scale of damage is getting reduced. Hence, we expect that the overall damage will be less than the amount we initially expected.”
Regardless if Bithumb is able to reduce damages and retrieve a portion of the lost cryptocurrencies, the South Korean exchange promises that investors will be fully compensated for any losses they suffered as a result of the hack.