13,000 bitcoins stolen in South Korea ahead of bill to legalise it

5 Jul 2017

Image: Adrian Today/Shutterstock

It was a case of incredible timing for South Korean legislators looking to push a cryptocurrency bill, with news that 13,000 bitcoins have reportedly been stolen.

Nation states’ attitudes to the growth of cryptocurrency has been anything but straightforward, with many – particularly those in the German central bank – fearful of how it could overturn traditional currencies.

This is despite bitcoin experiencing a major surge in price, where – at the time of writing – the exchange rate now amounts to just over €2,200 for one bitcoin.

Some countries are looking into bringing bitcoin in line with their own state currencies, including South Korea.

According to CryptoCoinsNews, a series of proposed bills being brought forward to South Korea’s government would make bitcoin and other cryptocurrencies such as Ethereum regulated currencies, thereby bringing users into a taxable system.

Havoc wreaked

Despite politician Park Yong-jin saying that his bills would offer “state-led protection” and prevent the possibility of “wreaking havoc”, the country’s financial regulator is not so convinced.

An official from the country’s Financial Supervisory Commission told BusinessKorea: “This bill will not be legislated at the request of the government.”

So, it is incredibly timely that South Korea’s Bithumb exchange – the fourth-largest in the world – has been hit by a massive hack, with 13,000 bitcoins stolen in a single go.

According to Brave New Coin, the cyberattack occurred last week, resulting in the loss of billions of won by bitcoin owners who used the exchange, which contains approximately three-quarters of all South Korean-held bitcoin.

One user alone has claimed to have lost 1.2bn won (€917,000).

Exchange denies funds were accessed

As part of the hack, a total of 31,800 Bithumb users’ details were obtained, including their phone numbers and email addresses, with the organisers of the exchange claiming this represents approximately 3pc of its user base.

The owners of Bithumb maintain that no account holder funds were accessed, despite more than 100 customers filing complaints with the police’s cybercrime agency about stolen bitcoin.

“The employee PC, not the head office server, was hacked. Personal information such as mobile phone and email address of some users were leaked,” it said.

“However, some customers were found to have been stolen from because of the disposable password used in electronic financial transactions.”

While it is unclear as to whether Bithumb will be financially held responsible for the breach, the legislation that Park is attempting to bring in would help clarify any similar issues in the future.

Colm Gorey was a senior journalist with Silicon Republic