Hackers have illegally withdrawn approximately $99 million from crypto exchanges and wallets in South Korea, a new study unveiled.
The report, titled “Status and Measures of Hacking Damage of Virtual Currency Exchanges in the Last Three Years,” issued by the South Korean National Police Agency, compiles cryptocurrency-related hacks that have harassed South Korean users since 2016. It finds that hackers have damaged a total of seven local exchanges and 158 wallets so far. In the same span, police managed to capture only six cybercriminals.
The number of attacks also showed growth as the years went by. In 2016, the crypto hacking incidents were lesser compared to the cases reported in the subsequent years. Excerpts from the report:
“The amount of money stolen by the hacking of cryptocurrency exchanges has been steadily increasing every year. The number of illegal withdrawals, which was only KRW 300 million [$265,280] in 2016, increased to KRW 40.5 billion [$35.9 million] in 2017, and two hacking cases occurred in 2018, amounting to KRW 71.3 billion [$63 million] in theft,”
In 2016, when activity around cryptocurrencies was low in South Korea, only Ripple4y – a local crypto exchange – confirmed an attack. The next year saw a notable jump with the hacks at Apizon, Bithumb, Coinis, and Youbit – another local crypto trading platforms. In 2018, police received complaints of only two hacking incidents: one from Coinrail and another from Bithumb. Bithumb is the only South Korean exchange which got hacked twice.
Interestingly, the number of attacks grew when the crypto market was undergoing a bull run. The police report finds that over 50 percent of the total reported attacks took place in 2017, especially when Bitcoin and the rest of the crypto market were mounting towards their all-time highs.
South Korean Crypto Exchanges Failed Security Test
The South Korean government in the past had scrutinized local cryptocurrency exchanges to test their security and privacy quality. All the results came negative. Interestingly, some of the exchanges got hacked specifically after the government pointed their security flaws in public. Many believed that hackers got their cues from the South Korean government itself.
For instance, YouBit got hacked in December after its inspection in October. Similarly, hackers attacked Coinrail and Bithumb after they were inspected and pointed out by the government.
“The nature of cryptocurrency exchanges is always exposed to cyber threat…the hacking accidents occurred even in the places where the government conducted security checks,” South Korean lawmaker Min Kyung-wook said.