Korean Cryptocurrency Exchange Breach Costs $30 Million in Stolen Coins

A breach and theft of a Korean cryptocurrency exchange over the weekend has resulted in the loss of a total of $30 million in value across nine digital currencies.

Korean exchange Coinrail has confirmed it had been the victim of a hack over the weekend. The exchange operator says it accounted for 70 percent of its coins, all of which has been moved to an offline cold wallet while the exchange and Korean police investigate the incident. The operator has also suspended its services amid the ongoing investigation.

Payments firm Pundi X, a company behind one of the breached tokens, said it is working with both South Korean law enforcement and Coinrail to investigate the breach. The fallout from the breach has also seen Pundi X freeze all token transactions.

The Pundi X team explained:

Since the amount of NPXS token is equal to 3 per cent of our current supply, which could potentially affect the interests of all parties, we instigated an emergency security protocol to halt ALL the NPXS transactions at 11:16 am Singapore time (GMT+8) to protect NPXS holders and help Coinrail and Korean law enforcement to investigate the incident.

While not directly involved in the attack, major cryptocurrencies Ethereum and Bitcoin saw their market values plummet by up to 10 percent follow the breach.

Coinrail said its system was hit by a “cyber intrusion” and while it did not directly quantify the value of the stolencoins, a report from local major news outlet Yonhap pegged the estimate at 40 billion won ($37.28 million).

A representative for the Korea Blockchain Industry Association insisted that the exchange did not follow any self-regulatory guidelines, a move which could have seen it enforce better security measures to avoid the incident altogether.

As reported by Reuters, Kim Jin-Hwa stated:

“Coinrail is not a member of the group that promotes self-regulations 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.”

Image credit: LIFARS archive.