A small South Korean crypto exchange is to close shop after a hacking of 17% of its assets, Youbit said in a statement on their website today.
Due to the hacking on our company at 4:35 in the morning, there was a coin loss of about 17% of total assets, the exchange said according to a rough translation before adding “the other coins were kept in the cold wallet and there were no additional losses.”
It is unclear how the coins were stolen, but this is the second time the exchange has been hacked, with 4,000 btc, worth around $73 million, lost in April.
The recent hack had “low rates of loss compared to last April,” the exchange says, suggesting the amount was less than 4,000 btc, but apparently too great nonetheless for the exchange to continue operations.
They are therefore to file for bankruptcy, with all cash and coin withdrawals suspended later today. But not after, apparently, allowing its customers to withdraw 75% of their balances.
“Through various measures, such as comprehensive insurance and the operating rights of the company, the loss of members is expected to be lower than 17%,” the company said.
However, it seems Youbit customers will have to go through bankruptcy proceedings to recoup the remaining 25%.
With the episode reminding us once again just how important security and handling your own private keys is, but the frequency of hacks for western exchanges has seemingly reduced this year, with none of the major ones suffering any publicly revealed losses.
Suggesting either their security methods have become more robust, or they are quietly covering them from profits as a cost of business.
But the story in South Korea is somewhat different. Even Bithumb, their biggest exchange, has been hacked, with their intelligence agency blaming North Korea.
Whether that starving country is really so sophisticated as to engage in state of the art hacking is unclear, but what is somewhat clear is that the fairly new South Korean exchanges do have much to learn from their western counterparts.