South Korean Cryptocurrency Exchange Files for Bankruptcy After Second Hack This Year

Youbit to shut down after losing 17% of its cryptocurrency holdings.

South Korean Bitcoin exchange Youbit has announced the beginning of bankruptcy proceedings following a hack in which 17% of its cryptocurrency holdings were stolen. This was the second such attack suffered by the exchange this year, according to a report in Reuters.

Back in April, 4,000 bitcoins, worth around 5 million USD at the time, were stolen from the same place.

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A pop-up notice on the Youbit website says: “I am very sorry to inform you again with the sad news. After the accident in April, we have done our best to improve the security, recruitment and system maintenance, and have managed to lower the hot wallet rate. Then, at 4:35 am, we lost our coin purse due to [a] hacking.”

The Korea Internet & Security Agency is reportedly investigating the attack.

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Cryptocurrency in South Korea is at a crossroads. The government has been flip-flopping somewhat on the issue of legalisation/regulation because it distrusts the new industry, but at the same time is being forced to recognise that outlawing the increasingly popular asset is not feasible.

It banned ICOs in September, and decided a week ago to allow Bitcoin exchanges to operate.

The authorities have some reason to worry about the tendency towards digital money. We reported back in July on claims that an army of 3,000 North Korean hackers, trained by China and Russia, were suspected of systematically targeting their southern neighbour.

The South Korean intelligence service attributes the April theft from Youbit to North Korea, as well as the hack of Bithumb, the country’s largest exchange. The personal information of 30,000 people was stolen in that particular breach.

Youbit concludes its statement with assurances to customers:

“In order to minimize the damage to our members, we will arrange for the withdrawal of approximately 75% of the balance at 4:00 am on December 19. The rest of the unpaid portion will be paid after the final settlement is completed. We will do our best to minimize the [losses] of our members by 17%, through various methods such as cyber comprehensive insurance (3 billion) and selling the operating rights of the company.”

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