South Korea: Bitcoin exchange shuts down after hack
20 Dec 2017

South Korean cryptocurrency exchange Youbit is closing down and filing for bankruptcy after being hit by hackers.

The crypto trader had suffered a previous attack in April, and had since tried to improve its security and maintenance systems, it said on Tuesday afternoon, but the latest development had led it to shut down.

“At 4:35 am, we lost our coin purse due to our hacking. The coin loss at 4:35 am is about 17% of total assets. The other coins were kept in the cold wallet and there were no additional losses,” it stated.

A “cold wallet” is a secure store used to hold assets not being traded.

“Loss ratio is low compared to last April, but the management of Yaffian Co., Ltd. is going to proceed with the procedure of stopping the transaction, stopping deposit and withdrawal, and bankruptcy on December 19, 2013.”

All coins and cash withdrawals were to be suspended with effect from 12:00 pm on 19 December, it added.

South Korea’s Internet and Security Agency (Kisa) has reportedly launched an enquiry into how the hackers gained access.

Investment in bitcoin has been making headlines over its price rocketing in recent months, but it has also increasingly come under attack from regulators and authorities in various countries who say it is a volatile and risky investment.

Some have indicated that those who invest in bitcoin may lose their money.

Andrew Bailey, head of the UK’s Financal Conduct Authority recently told the BBC that buying bitcoin was similar to gambling – and had the same level of risk.

“It’s not a currency, it’s actually not regulated in its bitcoin form.”

On Tuesday, Youbit explained that in order to minimise damage to its members, it would arrange for the withdrawal of approximately 75% of the balance initially and the rest of the unpaid portion would be paid after [a] final settlement is completed.

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