Cryptocurrency Exchange Bithumb Suspends Trading Amid $31 Million Hack

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Hackers made away with $31 million worth of Bitcoin from Korea-based exchange Bithumb - one of the largest in the world. Although Bithumb still hasn't revealed which cryptocurrencies were affected by this hack, they assured that all the losses from the theft will be reimbursed from the reserves of the exchange.

It's fascinating how thousands of cryptocurrencies store their funds in third-party custodial wallets, which have been proved vulnerable by a series of hacks in last few years.

The heist sent tremors throughout cryptocurrency markets, dragging down the price of coins and tokens across the board.

Before the Bithumb hack, the market appeared to be recovering as it gained more than $12 billion in total market capitalization. "Relying less on the security of the individual wallets and more on the underlying systems of the exchanges should lead to an improvement in overall security", Chappell said.

The values of coins including Bitcoin, Ethereum and Ripple have fallen in reaction to the news. "But it's an important lesson to learn from that exchanges are always at risk and crypto should be held at a [offline] cold wallet". Those stolen cryptocurrencies will be covered from Bithumb and all of assets are being transferring to cold wallet.

The hack happened 10 days after South Korean crypto exchange Coinrail lost around $40 million to hackers. It says that most of these exchanges have security vulnerabilities, including insufficient network isolation, an absence of monitoring systems for abnormal or suspicious activities, and inadequate cryptographic key and password security management.

Bithumb, which trades more than 37 different virtual currencies on its platform, has a 24-hour trading volume of almost $400 million, according to statistics obtained from CoinMarketCap, which makes it the sixth largest virtual currency exchange in the world.

For the second time in two weeks, South Korea was hit with a multimillion-dollar cryptocurrency hack. Bitcoin was knocked from $6,760 to $6,611 in a matter of hours. Still, the frequency of cryptocurrency exchange hacks is something that will leave many traders anxious. Demand for Bitcoin was so extreme at one point that it lifted prices in the country 50 percent higher than those in America.