It is a sad and disappointing day in the Bitcoin market because of the recent hack of one of the largest Bitcoin and Ether exchange platforms known as Bithumb. People not only suffered the loss of billions of won but had to face the leak of their important information like phone numbers and email addresses as their accounts were compromised as well.
What is Bithumb?
Following US, China, and Japan, Bithumb is the fourth largest bitcoin exchange platform in the world. For Ether market, it is considered the largest exchange in the world.
Bithumb alone boasts 75.7 percent share of the entire bitcoin market in South Korea. It is the main hub of bitcoin trading in South Korea, facilitating 13,000 trades per day. 44 percent of the total Ether trade of the country is through Bithumb.
Fatal consequences of the cyber attack
The giant of bitcoin market faced some serious setbacks as a result of the recent cyber-attack. According to reports, a number of user accounts were hacked, and 10 billion won worth of bitcoin were taken from the account of a single user.
Victims were further outraged when the news of their information being leaked was surfaced. The compromised information included victims’ names, phone numbers, and email address. Hundreds of angry users have filed a complaint with the National Police Agency against the cyber-attack that left them vulnerable to security threats as well as monetary loss.
Bithumb’s defense against the allegations
While users are furious about their accounts being wiped clear and personal information being stolen, Bithumb is still defending itself by saying that it is possible for any attacker to breach the security and directly access the user accounts.
Bithumb claims that only a single computer was compromised and the news of an entire network being hacked is fake. It further explains that the loss of funds users are suffering is due to the use of disposable passwords during electronic financial transactions.
“The employee PC, not the head office server, was hacked. Personal information such as mobile phone and email address of some users were leaked. However, some customers were found to have been stolen from because of the disposable password used in electronic financial transactions.”
Is it just another case of Voice Phishing?
Some users testified that they received fake calls from hackers claiming to be an official representative of Bithumb. Therefore it can be said that this might be a case of voice phishing.
Hackers exploited the users by feeding them the false information of a cyber-attack on their accounts and then asking them for their identification number, which was the one-time password provided to them by Bithumb. Using this password, they accessed victim’s account and stole funds from it.
What is the compensation for the loss?
Bithumb is willing to compensate victims in the form of a hundred thousand won and more after the confirmation of the news.
The company has filed a report with the Korean Communications Commissions and the Korea Internet and Security Agency along with the Supreme Prosecutors’ Office.
Can Bithumb be held liable for the losses?
Digital currency was not given a legal standing in South Korea up till now. Therefore it can’t be said for sure whether Bithumb would be held liable for the losses or not.
However, in the course of recent events, the government has decided to revise the Electronic Financial Transaction Act and recognize digital currency as a legitimate medium of transaction.
The bill to be proposed in this regard will allow companies with more than 500 million won worth of capital who possess a large enough professional staff to manage such digital transactions.
More recent attacks on digital currency in South Korea
It is not the first South Korea is facing an attack on the digital currency. A couple of months ago, another S. Korean Bitcoin exchange Yapizon was hacked, and 3816.2028 Bitcoin (US$5 million) were stolen. It is about time that South Korea should learn its lesson and do something to protect it.