Not sure how many of you will have noticed this seemingly innocuous, even indecipherable, Tweet on Sunday from Conrail:
- 해킹공격시도로 인한 시스템 점검중입니다. 일부코인(펀디엑스,NPXS)이 확인되었으며 추가적인 코인피해가 있는지 여부를 확인중입니다. 추후 자세한 사항은 재공지하겠습니다 -.
Which roughly translated means – We’ve had a cyber intrusion in our system - we’re doing a system check but so far some coins (Fund X, NPXS) are identified as being lost - we will notify you again later.
Obviously there will be a lot of worried people out there now as a subsequent statement from Coinrail admitted that they had 30% of the virtual coins traded on their exchange stolen, estimated by other sources to equate to about 40bn KRW (£27.8m).
Looking back there have been quite a few ‘bank-jobs’ targeting VC in the last few years, with the most notable to date being the successful attack on the Mt.Gox exchange in 2014 yielding 744,408 BTC, which equates to about $350 million at today’s rate.
Then in 2016, Bitfinex, lost 119,756 bitcoin to hackers, then worth $72 million but valued at over $950 million today.
Then in 2017, after suffering 2 separate attacks (allegedly by North Korean hackers) the South Korean exchange Youbit, filed for bankruptcy.
In December 2017, EtherDelta, another cryptocurrency exchange suffered a hack attack and suspended services.
Europe-based NiceHash lost tens of millions of dollars from an attack late in 2017, and Tether, a start-up that works with exchanges, said it lost $31 million in November 2017.
In January of this year Coincheck, a Japanese cryptocurrency exchange, claimed it lost more than $400 million in tokens through hackers.
These hacks plus increasing volatility in the cryptocurrency markets in general is causing concern not only for world governments but also some major finance houses, particularly in the USA. This month, Wells Fargo announced a ban on cryptocurrency purchases using its credit card. This is following on from other US giants Bank of America, Citi and J.P. Morgan who have already announced similar bans citing their concerns over the volatility in the market and a resultant possibility that their customers may default should prices drop drastically.
With the Bitcoin year-to-date price now dropped by 50%, maybe they have some just cause for concern.
What you can be sure of is that government agencies around the world that were already sitting up and taking action on blatant instances of price manipulation will have noted that, in their opinion, these latest attacks highlight the lack of security and weak regulation in the Bitcoin and cryptocurrency markets and only serve to strengthen their push for oversight.
The knock-on effect being that none of this can instil great investor confidence.
In the meantime, these incidents serve as timely reminders to those already invested that they would be foolhardy to leave their tokens inside an exchange - better to play safe and secure them in a preferred option of a privately keyed off-line hardware wallet and make a safe back-up on an alternate encrypted device!!