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06 Jul 2017

Bithumb, one of world's largest cryptocurrency exchange, gets hacked

Bithumb leak proves that cryptocurrency needs proper regulations

South Korea-based Bithumb, which is one of the world's largest cyber-currency exchanges, is now being investigated by the Korea Internet and Security Agency.

This comes after the firm acknowledged that one of its employee's PC was hacked and 30,000 of its customers' personal details were stolen.

This stolen data was used by the thieves to steal funds from their accounts.

Here's all about it.

In context

Bithumb leak proves that cryptocurrency needs proper regulations
A home PC and not company server


A home PC and not company server

Bithumb allows its members to buy and sell virtual currencies: Bitcoin and Ethereum. Based on recent trading volumes, it's one of the five largest exchanges in the world and the biggest in South Korea.

The breach, reportedly, occurred in February and involved an employee's home PC and not the company's headquarters' servers, which raised a red flag as it was out of the norm.


How the leak affected customers

The Yonhap news agency said that the firm discovered this breach several months later, on June 29 and subsequently reported the authorities.

According to the notice, the leaked data didn't comprise of customers' passwords. However, several customers complained of receiving follow-up calls and texts from scammers in June that urged them to divulge their accounts' authentication codes.

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Compensation scheme is not clear


Compensation scheme is not clear

Reportedly Bithumb is promising to cover losses of up to 100,000 won (South Korean currency) per customer initially and to add to this after verifying the exact amount that individuals have lost in this fiasco. However, it's not clear if victims are going to get compensated entirely, once details are ascertained.

There have been rumors of one member losing as much as 1.2b won.


A proper regulatory framework is needed

Currently, South Korea's financial authorities don't regulate virtual currencies and have failed to take a unified approach till date in this matter.

It remains to be seen if this leak unites them to draft a proper regulatory framework.

Virtual currencies are becoming more common with passing time; every country should take notice and create their own set of rules to address their usage.

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