More than $1,1 bln lost. What can you learn from it?
TechnologyBit News Today2 min read
Hackers stole more than $1.1 billion in cryptocurrency from various sources in a six-month span in 2018, with a significant share of that coming from South Korea’s Bithumb exchange. Perhaps too late: investigations continue.
Panicked, large cryptocurrency holders in South Korea quickly began contacting Bithumb to see if they could take advantage of refunds. Some of the stolen funds were refunded to Bithumb users using the exchange's own reserves, but the agencies still have not officially disclosed details from the investigation so far.
In a statement, Bithumb assured investors that users would receive their losses back using its own reserves. It also revealed that the agency is investigating and searching for ways to make sure people get repaid for the cryptocurrency that has been stolen.
The South Korea-based exchange Coinrail disclosed the theft on June 10 and maintained that 70% of its assets were safe, while around 40 million dollars worth were stolen. The exchange says that 70% of its reserves are now stored in a secure cold wallet and reports the rest were stored in an online storage system and later accessed via a security flaw in the company’s system designed to connect to online storage.
The exchange's recent breach raised critical questions and not just about refunds. The tokens themselves are now listed at a discounted rate: the stricken currencies have dropped to around 30 million dollars since the theft.
The attack on Bithumb is only one of a string of cryptocurrency-related thefts that have occurred in 2018, as cryptocurrency theft continues growing in frequency and scope, according to recent security studies. Of the six-month time span in this year's first half, exchanges comprised 27% of attacks, according to a report by Carbon Black.
The recent news has urged IT professionals everywhere to revamp cybersecurity strategies or evolve the processes that protect user information and corporate assets. Businesses from any vertical should consider a strategy of blockchain sensitivity to make smart decisions about the way they protect information and secure cryptocurrency, and it starts with cold wallets as recommended by Carbon Black.
Regulation is lagging
To date, the cryptocurrency world has been largely unregulated. Bitcoin is controlled by and for the people, but the world is far from perfect and we lack one comprehensive strategy for each country:
Japan has some forward momentum, while the U.S. is more divided. Some regions have even banned cryptocurrency activities all together. In the United States, there are few federal laws governing how cryptocurrencies can be regulated.
There are scant federal regulations in the U.S. that describe how people should disclose or handle their holdings in cryptocurrencies, and enforcement at a federal-level will be a slow process. It remains to be seen if the IRS will develop its tax laws covering cryptocurrency, as well as any regulations regarding electronic trading and capital gains.
If the statements from Europe and other countries are a signal, there will be more federal regulation in the future.
