Another $32 million of crypto, gone. Disappeared. Evaporated.
On Wednesday, Bithumb, South Korea's largest cryptocurrency exchange, revealed that hackers stole $32 million worth of assets overnight. The since-deleted tweet that broke the news also claimed Bithumb would compensate any investors who lost their crypto in the hack.
For now, Bithumb has paused all deposits and withdrawals and moved all remaining assets to a cold wallet — a type of crypto storage not connected to the internet — according to subsequent tweets. A report from Yonhap News Agency claims police in Seoul have launched an investigation into the theft.
If this feels familiar, you're not wrong. This is the third hack on Bithumb in the past year. And it's the second major hack of a South Korean exchange within the past two weeks — Coinrail lost a reported $37 million worth of crypto in a June 10 hack. In response to that hack, as well as this one, the values of several major cryptocurrencies, including bitcoin and ether, have tumbled.
While the blockchains supporting cryptocurrencies are decentralized (they store information in many places), most of the exchanges that host crypto trading are not — that is, they store information in one place. This makes them a prime target for hackers. And while the hacks are potentially devastating for investors, they could ultimately help the crypto market by motivating governments to speed up the process of regulating it. These regulations could force exchanges to meet certain security requirements, which might make it harder for hackers to access investor funds in the future.
Until then, investors might want to think carefully about storing their crypto on centralized exchanges, and whether it's worth the risk of a hack.