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Coinrail is yet to Assess the Real Damage of Hacked Altcoins

Coinrail Is Yet To Assess the Real Damage of Hacked Altcoins

South Korea’s Coinrail cryptocurrency exchange has probably suffered the worst hacking in the country’s history in the digital coin sector. Though the company indicated that it is yet to assess the real damage of hacking of altcoins, there is an estimation doing the rounds in the media suggesting it to be about $42 million or approximately 45 billion won in local currency. This is the third exchange for bearing the brunt of the cyber criminals who were targeted on a number of altcoins.

Worst Hit

According to a report in the news .bitcoin, the worst hit in the hacking was the recently introduced Pundi X’s NPXS token. Incidentally, the digital token represented nearly two-thirds of the trading volume in the Coinrail’s virtual currency trading volume. According to the exchange’s website, there were others coins too that faced a similar fate. This included DENT, NEPR, and ATX.

Interestingly, a local media, Chosun, disclosed recently that some of the domestic banks came to know about the money-laundering activities at the Coinrail digital currency exchange in February. The publication said that a number of banks, which traded with the cryptocurrency exchange, found suspicious money-laundering transactions. Some of the banks have taken steps to stop their fund deposits a few months ago. There were no other specific reasons for the banks to suspend their services.

South Korea enjoys the third position in the acceptance of cryptocurrency in the world with the United States leading the way and Japan following it as the second sport. The banks in the country are empowered to refuse service to any digital currency exchanges with the help of two main regulations. That included the Financial Transaction Reporting and Use Act, as well as, Virtual currency Anti-Money Laundering Guideline for failure to use real-name accounts.

Though the system of real-name was established in January end by the regulators, the conversion rate was termed as a low one. Significantly, the hacking incident has attracted much attention from the local media since it was termed as the biggest cyber theft until now in terms of the local currencies.

Coinrail was not the only exchange to have affected by the theft. There are two more in the country. In April, Youbit suffered security breaches, and the same exchange had to face it again in December. After the first attack, Youbit has been operating under Yapizon name until April. According to the exchange’s notice, about 70 percent of the total coins were moved to cold storage.

The digital coin exchange added, “About 80{ff0ffafc4eeb34b3872d3a1dbbcf802c0cd7c42241427156582b3a7ea64b083a} of the coins that have been confirmed to be leaked have been frozen/ withdrawn/ redeemed, or equivalent…while the remainder is under investigation with investigators, related exchanges, and coin developers.”

Accident or Crime

A Korea Times report suggested that investigators have visited the Coinrail exchange to assess whether it was a crime or an accident. The case is being investigated by the Korea Internet Development Agency (KISA), the police and the ministry of science, technology, and information. KISA is also said to be assessing the incident cause along with the National Police Agency.

About the author

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Megan Mayle

Megan, while pursuing MBA in California, started writing blogs on the financial developments and revolutions around the globe and soon got caught up with cryptocurrencies. She has been giving consultancy about smart contracts. Megan focuses on latest updates on cryptos from banks and on regulations by governments worldwide.

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