South Korean Exchange Suffers a Hack, Sending Crypto Markets Tumbling

If you haven’t checked the cryptocurrency market in the past 24 hours, you may be in for a shock. Bitcoin has fallen the most that it has since May 23, as Bloomberg pointed out, and is currently hovering at $7,200, down 5%. The broader cryptocurrency market is in selloff mode too, with just about each of the top 100 coins trading in the red.

Source: CoinMarketCap

The culprit appears to be a security breach at South Korean cryptocurrency exchange Coinrail, which according to the exchange’s website occurred at dawn. Coinrail, which ranks at No. 94 for trading volume, has contacted local authorities and is currently picking up the pieces.

Coinrail pointed to “security intrusions” targeting a handful of altcoins, including NPXS, NPER and ATX digital currencies, all of which have since been frozen. The exchange has also directed about three-quarters of cryptocurrency funds to cold storage, which is an offline way of securing funds. An update on the Coinrail website said:

“Seventy-percent of your coin rail total coin/token reserves have been confirmed to be safely stored and moved to a cold wallet and are in storage,” according to a statement on Coinrail’s website.

Coinrail also provided an update on the trio of affected coins –

  •  NPXS and ATX: Frozen
  • NPER: Frozen “and additional to be issued”

All three coins are down sharply. Pundi X was down 9% at last check, ATX coin is down 27% and NPER is off 15%.

Three-percent of the Pundi X token supply was affected by the hack and was apparently sent to the IDEX exchange. Pundi X updated its Twitter followers that $NPXS transactions are halted at the direction of the Korean National Police Agency, adding they hope the Coinrail hack “can be resolved soon.”

 

Based on a tweet from NPER, they might have the hacker where they want them.

“While some NPER tokens appear to have been hacked from the exchange, the NPER team placed the hacker’s wallet address on a permanent “ Lock “ and made it impossible to move, according to NPER on Medium, urging its investors to remain “relaxed.”

Coinrail is ranked No. 94 among cryptocurrency exchanges for trading volume, with less than $3 million transacted over the most recent 24-hour period. While there’s never a good time for a security breach, the cryptocurrency markets were beginning to show some resilience, and despite some recent selling, bitcoin was within earshot of the $7,800 level. Now it will have to regain lost ground once again, serving as a reminder of just how fragile a market without formal regulation can be.

Featured image courtesy of Shutterstock.

Author:
Gerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.