Bithumb Hacked: Second-Largest Korean Exchange Loses a ‘Modest’ $32M

For the second time this month, an exchange in South Korea gets hacked, resulting in an eerily similar dip in Bitcoin's price that mirrors the trajectory during the previous incident.

Bithumb, the second-largest exchange in South Korea by trading volume, announced in a tweet it deleted a few hours ago that it suffered a breach in which at least $30 million in cryptocurrency was lost. Our calculation of estimated losses puts the figure closer to $31.53 million.

The exchange then put up another tweet adding that it has suspended all withdrawals and deposits on its platform for security purposes and omitting the amount that it lost as a result of the hack.

Almost immediately after the attack, Bitcoin took a marked dip, shedding more than $100 of its value and more than $2 billion in its market capitalization.

Other cryptocurrencies, most notably Ether, took a similar turn at around the same hour.

This incident could not have come at a worse moment, as tensions between the South Korean government and cryptocurrency exchanges were just beginning to cool. The country had just recently walked away from a potential ban on exchanges altogether and cleared both Bithumb and its larger rival Upbit of wrongdoing after a thorough investigation of their finances.

Still, as far as hacking incidents go, this is no Coincheck. Bithumb only lost a small fraction of its reserves, accounting for less than 10% of its daily trading volume. The company assured its users that it would cover the losses from these reserves, adding that it’s moving assets to cold storage for the time being.

This is, interestingly enough, the second time just this month that the hacking of an exchange in South Korea launched a sharp dip in the cryptocurrency market. Barely two weeks ago, a smaller exchange in the country—Coinrail—experienced losses of $37 million due to a breach. On that day, Bitcoin lost a whopping $8.23 billion from its market share.

These drastic declines in market capitalization just after hacking incidents that—despite being significant—shouldn’t be very impactful are worrisome and indicate some nervous trigger figures, to say the least.