After hackers stole digital currency assets from South Korean currency exchange Coinrail recently, the question must be asked, can bitcoin and other crypto-currencies be safe? The problems don’t seem to lie in the blockchain technology, but instead in the exchanges that provide servicing to crypto-currency users.
This isn’t the first time an exchange has been hacked, or even the second or third time. So users must take into account the idea that the place housing their crypto-currencies may not be altogether safe. Can you imagine a rash of bank robberies in your town, but without any FDIC insurance? You would be within your rights to head into your local branch and empty your account. The question is, how much risk are crypto-currency traders willing to take on? Will they hang in there, or empty their accounts?
Steven Russolillo reports on the hack at the WSJ:
Coinrail didn’t say how much was stolen in terms of value, but it is possible that more than $40 million worth of alt coins were taken, according to a wallet address that some have said belongs to an attacker.
South Korea is a hotbed for cryptocurrency trading. But Coinrail is small relative to its competitors. Before the attack, Coinrail ranked near the bottom of the 100 biggest cryptocurrency exchanges in the world by trading volume, according to data from coinmarketcap.com.
South Korean regulators have taken a tough stance in trying to tame the cryptocurrency market, which is one of the world’s busiest as measured by trading volume. Exchanges in South Korea have a history of being hit by cyberattacks.
Hacking has been a problem for the cryptocurrency market world-wide in recent years. In January, Japanese exchange Coincheck Inc. was attacked and a small Italian exchange called BitGrail was hit in February. Since 2014, exchange hacks have cost investors at least $1.4 billion, according to an analysis by The Wall Street Journal.
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