South Korea plays an important role in the cryptocurrency world. Ever since China lost its dominant position, South Korea has become of the Asia’s biggest Bitcoin and altcoin trading hubs. That success comes with potential issues, as numerous exchanges have been hacked in the process. The following three examples represent just a fraction of incidents since 2016.
#3 Yapizon Loses $5m
The Yapizon cryptocurrency trading platform suffered from a big hack in April of 2017. A total of 3,800 worth of Bitcoin was lost due to this incident, valued at $5m at the time. The current value, puts that figure closer to $25m, which further illustrates how bad things have gotten over the years.
Although the funds were never recovered in the process, the company did not compensate users immediately either. Instead, they took a page out of Bitfinex’s book by reducing all customer balances by an equal amount to cover the losses. It is not a popular decision by any means, yet the company saw no other option but to take this approach.
#2 Youbit Goes Bankrupt
A cryptocurrency exchange hack can have many different outcomes. Although Youbit users lost a fair bit of money during the hack, the attack created a lot of other problems later on. Youbit, the firm known as Yapizon mentioned above, did not evade criminals despite changing its name.
In fact, a second attack during December of 2017 forced the company to make a crucial decision. After halting deposits and withdrawals, the company launched an investigation. All funds remaining in the company’s possession were disbursed to clients, but the missing funds were never recovered in the process. A sad incident, especially for those who suffered from both hacks in the span of eight months.
#1 Coinrail Loses Funds
The year 2018 has not been great in terms of exchanges getting hacked. Coinrail, one of South Korea’s most prominent trading platforms, suffered from a hack in June of 2018. It is believed roughly $40m worth of funds have been stolen by criminals, which promptly forced the company to suspend all services temporarily.
There were numerous concerns regarding the transparency following this incident. Coinrail did not disclose all affected currencies initially, nor did they share amounts of funds being taken. Thankfully, most details became apparent later on, and unfortunately the exchange has not been able to recover all of the stolen funds in the process. Most of the funds were frozen in time to prevent liquidation, which is the silver lining in this whole incident.