Fourth Largest Cryptocurrency Exchange Was Hacked. Users Lose Ethereum & Bitcoin

Fourth Largest Cryptocurrency Exchange Was Hacked. Users Lose Ethereum & Bitcoin


Bithumb, the world's fourth largest cryptocurrency exchange by volume,

confirmed a security incident during which an unknown hacker was able to make off with an yet undetermined amount of funds. Clues that something was wrong emerged on Thursday, when South Korean users, who make most of Bithumb's userbase, started complaining on a local social network about losing control over large funds stored in their Bithumb accounts. A day later after these complaints, the company officially admitted the breach in a blog post on its website, albeit it did not provide any meaningful details.

Attacker hacked Bithumb employee's PC

More facts came to light on Monday, when pressured by local media, the company revealed that the breach occurred after an unknown attacker hacked the personal computer of a Bithumb employee, from where he stole the details of over 31,800 Bithumb users — about 3% of the platform's entire userbase. According to local media [1, 2, 3, 4], the hack took place at around 22:00, local time, on Thursday, June 29, and the documents the hacker managed to access contained data on customer names, email addresses, and mobile phone numbers.

Soon after, Bithumb users started complaining online that someone was draining their accounts. It is unclear how the hacker gained control to targeted accounts. Some users reported losses as big as 10 million won ($8,700) worth of cryptocurrency. Local media grossly estimates that the attacker made off with billions of won in cryptocurrency, but Bithumb never confirmed the exact amount of stolen funds.

Bithumb promises to reimburse users

Based on a blog post published on Monday, the exchange doesn't seem to know the exact amount of money the attacker took. Nonetheless, in a gracious move, the company is willing to provide compensations of up to 100,000 won ($897) per affected user until midnight July 5. "As soon as the amount of damages is confirmed, we will reimburse the entire amount of damages," said Bithumb in an official statement.

According to user complaints, the hacker stole both Bitcoin and Ethereum from user accounts. Besides being the fourth largest cryptocurrency exchange by volume, Bithumb is also the Internet's second largest Ethereum trading platform by volume. Bithumb told South Korean media it contacted law enforcement last week and informed them of the theft. Two months ago, an unknown attacker hacked fellow South Korean Bitcoin exchange Yapizon and stole 3816.2028 Bitcoin (over $5.5 million). This is not the only Ethereum-related hack that took place this past we

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Bitcoin and Decentralized Networks are the Future, Says University Professor

Bitcoin and Decentralized Networks are the Future, Says University Professor

Bitcoin and Decentralized Networks are the Future, Says University Professor


Lorenzo Fioramonti, Professor of Political Economy at the University of Pretoria (South Africa), who also directs the Centre for the Study of Governance Innovation, recently published a write-up stating that money systems are in the process of transitioning from “centralized authority to decentralized networks.”

Cryptocurrencies represent a significant part of such decentralized networks. According to Fioramonti, there is a growing demand for digital currencies. On one hand, he exemplified with the recent adoption of cryptocurrencies in the world. Japan regulated bitcoin in April 2017, while the Russian government – who threatened virtual currencies last year – made a U-turn and even President Vladimir Putin met with Ethereum founder Vitalik Buterin. In addition, China halted its initial freeze on bitcoin exchanges in the country, therefore, the major BTC exchanges in the country resumed trading in June 2017. In the United States and Australia, digital currencies are experiencing higher adoption rates, in addition, the Oceanian country will soon exempt traders and investors from goods and services tax.

The professor stated, in the near future, cryptocurrencies will “become much more common as methods of payment for a wide range of purchases, from online shopping to the local supermarket.” Not just developed, but developing countries are making efforts to implement digital currencies in their economies, Fioramonti wrote.

In Venezuela, where the current economy is facing major problems, bitcoin has become “the leading parallel currency”, the professor wrote. While the official national currency of the South American country is worth almost nothing, bitcoin can be used to perform transactions, buy food along with other basic necessities, and to purchase products from overseas countries bypassing the strict controls on capital.

Local innovators in East Africa implemented the use of cryptocurrencies in cross-border transactions. An example for this is BitPesa. According to the professor, the popularity of cryptocurrencies in South Africa is also on the rise. Since the Nigerian government failed its citizens by conventional money, local traders and activists believe digital currencies has a potential to democratize the economy. Verengai Mabika, founder of BitFinance in Zimbabwe, stated bitcoin is an attractive alternative for conducting online payments and remittances, which “constitute the backbone of the economy.” Verengai told Fioramonti that 37 percent of BitFinance’s customers use cryptocurrencies for savings since the 2008 hyperinflation resulted in the collapse of the Zimbabwe’s financial institutions.

Fioramonti stated that decentralization is the “core of this new trend.” According to the professor, the use of cryptocurrencies “will make economies more resilient against shocks and will support more equitable and sustainable development, by putting users in the driver seat and reinforcing local economic development.”

David Ogden


Author: Benjamin Vitáris


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