Category Archives: Korea Blockchain Industry Association

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South Korean Exchange CoinRail Suffers Major Hack

Sources over the weekend suggested that South Korea Cryptocurrency platform CoinRail had been hacked, a fact that was confirmed on its website this morning, according to Reuters.

CoinRail’s statement explains that its system suffered a “cyber intrusion” on Sunday causing a loss of 30% of its traded coins. Sources speculate that the amount stolen might be in the region of KRW 40 billion (Korean won worth roughly USD 37 million) but this has not been confirmed by the company. The exchange is ranked 90th in the world with a USD 2.6 million daily trading volume.

News sources have pointed to the hacking as being the reason for Bitcoin’s overnight drop in value over the weekend, but some pundits are pointing towards the news of Friday’s announcement by the US Commodity Futures Trading Commission that they were investigating three major cryptocurrency exchanges: Coinbase, Kraken, and Bitstamp, along with others.

The breach included NPXS tokens from the Pundi X project, who commented on their site yesterday:

“This morning on June 10 we received notification from Coinrail: There was an unauthorized suspicious trading activity involving 2,619,542,080 NPXS tokens transferred to IDEX”.

“The CoinRail team is now working with the Korean law enforcement to investigate the account holder involved in the unauthorized transactions. Once we get an update from CoinRail, we will update our token holders immediately about the development of this incident. We hope the incident will resolve soon,” it added

Data from Etherscan.io shows the address tried to sell some 26 million NPXS tokens at IDEX, a decentralized Ethereum asset exchange, right after it received 2.6 billion NPXS from another address that is also now labeled as a suspicious account – ‘Fake_Phishing1431’.

Other tokens stolen in the alleged breach were ATC from Aston and NPER project’s NPER token, although there are unconfirmed reports that several other tokens, including Ether, may have been compromised.

There have been numerous warnings from government agencies and regulators about the risks of cryptocurrency trading, not simply in South Korea, but in many countries around the globe; many are in the process of regulating their own financial banking strategies regarding blockchain and cryptocurrency.

Kim Jin-Hwa, a representative at Korea Blockchain Industry Association commented, “CoinRail is not a member of the group that promotes self-regulation to enhance security. It is a minor player in the market and I can see how such small exchanges with lower standards on security level can be exposed to more risks.”

 

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