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South Korean Cryptocurrency Exchange Giant ‘Bithumb’ Reopens User Registration Feature

Bithumb has resumed registering new users, more than two months after suffering a hack. The South Korea based platform experienced a massive spike in trading volume following the announcement. Some experts believe the user registration resumption by the platform contributed to the recent Bitcoin price increase.

Back to Normal Cryptocurrency Trading Operations

According to a local South Korean news media platform, Yonhap News, Bithumb has reopened the registration feature for the new users. The move comes after an agreement between Bithumb and Nonghyup Bank – the platform’s banking partner, to resume providing banking services to the platform.

In the aftermath of the June 2018 hack, the bank had discontinued its partnership with Bithumb owing to perceived lack of compliance on the part of the exchange platform to customer protection protocols. The South Korean government has taken several steps to eliminate anonymous cryptocurrency trading. Thus, virtual currency exchange platforms must run virtual accounts for their users tied to their real-name bank accounts.

Bithumb Trading Volume Experiences Massive Spike

News of the resumption of user registration on the platform has catapulted Bithumb’s daily trading volume. Previously Bithumb had fallen from its top 10 status to languish further down the pecking order of virtual currency exchangers. Less than a week ago, Bithumb was ranked 19th by Coinmarketcap with a daily trading volume of $60 million.

As at press time, Bithumb is back to the top-ten zone and is currently occupies the 5th position on the log. The platform’s daily trading volume has also surged to $350 million.

The June 2018 Bithumb Hack

In June 2018, Bithumb suffered a hack that resulted in the theft of $30 million. The incident occurred less than a fortnight after Coinrail; another South Korea-based platform was hacked. A few days after the hack, Bithumb announced that it had recovered about $14 million worth of the stolen cryptocurrency.

In the aftermath of the hack, the platform hurriedly tried to clear its hot wallet to prevent further disaster. In doing so, the platform allegedly put pressure on the market causing BTC transaction fees to increase by 400 percent in less than 24 hours.

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Bithumb Hacked – $30 Million in Cryptocurrency Stolen

In what has become a recurring theme in the digital currency industry, another cryptocurrency exchange platform has suffered a cyber intrusion. Suspected cybercriminals have hacked Bithumb, the South Korea-based exchange platform. This incident is the second of such attacks on a crypto exchange platform in South Korea, in as many weeks.

Details of the Bithumb Hack

Bithumb announced on Wednesday, 20 June 2018 that $30 million in cryptocurrency had been stolen from its coffers. As at the time of writing this article, the platform hasn’t specified the coins taken from the platform. However, the Sentinel Protocol, a team that focuses on online hacking and scams, said that Ripple (XRP) was among the coins stolen in the attack.

Announcing the hack, Bithumb said:

[Notice for the suspension of all deposit and withdrawal service]

We checked that some of [our] cryptocurrencies valued about $30,000,000 was stolen. Those stolen cryptocurrencies will be covered from Bithumb, and all of [our] assets are being transferred to [a] cold wallet.

Timeline of the Hack

The exact time the hack occurred is unknown at the moment. However, Bithumb reportedly moved a significant amount of Ether tokens to its offline wallet. This decision was due to some unusual activity regarding unauthorized access to its online wallets. The platform announced a server check on June 16 – lasting from only a few hours. However, the server check, which was to upgrade Bithumb’s security protocols, exceeded the scheduled few hours.

At precisely 00:53 UTC on June 20, 2018, Bithumb disabled deposits on the platform. The exchange service also began to move all coins stored in online wallets to more secure offline wallets to prevent more theft.

Bithumb plans to compensate users affected by the hack – they intend to cover all the losses. The platform is the sixth-largest in the world, with an average daily trading volume of almost $400 million, according to CoinMarketCap.

Second Exchange Hack in As Many Weeks

Less than two weeks ago, reports emerged of another hack on a South Korean-based cryptocurrency exchange platform. This time, it was Coinrail, a relatively smaller exchange service. The Coinrail hack coincided with a significant dip in the prices of cryptocurrencies, with Bitcoin losing $1,000 in a matter of hours. Thus, some experts declared that the hack was responsible for the decline.

However, the consensus among most experts is that the recent investigation by the U.S. government on suspected price manipulation activities in the market as well as the expiration of Cboe Bitcoin futures contracts was the likely cause of price reduction. Still, the frequency of cryptocurrency exchange hacks is something that will leave many traders worried.

Before the Bithumb hack, the market appeared to be recovering as it gained more than $12 billion in total market capitalization. There seemed to be signs of an emerging bull run as Bitcoin stayed above the $6,700 mark. However, since the news of the hack emerged, Bitcoin dropped $200, eroding all the gains of the past few days.

At the time of writing this report, most of the top 100 coins have declined in the past few hours, presumably due to the Bithumb hack.

Do you think the Bithumb hack will cause a massive dip in the prices of cryptocurrencies? Keep the conversation going in the comment section below.

Image courtesy of Twitter (@BithumbOfficial) and CoinMarketCap

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Bithumb Exchange Bans Trading Activities in 11 Different Countries

Bithumb, the biggest South Korean exchange, has banned trading activities in 11 different countries around the world. Among the affected nations we find North Korea, Iran and Iraq. The main intention behind the ban is to comply with global anti-money laundering norms.

Bithumb Blocks Trading in 11 Countries

The most important crypto exchange South Korea will be working so as to comply with international regulations and anti-money laundering rules. The exchange will block transactions from residents that are part of the Non-Cooperative Countries and Territories (NCCT) blacklist.

These countries are seen as nations that did not comply with international money laundering, terrorist financing and other norms. The international organism in charge of the list is the Financial Action Task Force – also known as FATF.

The remaining countries in the list are Bosnia and Herzegovina, Ethiopia, Syria, Iran, Iraq, Sri Lanka, Trinidad and Tobago, Tunisia, Vanuatu and Yemen. With this measure, new users from these countries will not be accepted in the platform and old accounts will be disabled on June the 21st.

According to data from CoinMarketCap, Bithumb is the fifth cryptocurrency exchange by trading volume in the market handling $477 million dollars in the last 24 hours. The most important trading pairs are EOS/KRW, TRX/KRW and BTC/KRW and they account for 75% of the total trading volume on the platform.

FATF Rules

This is a very important decision because during the last G-20 financial meeting, the participating countries decided to implement the Financial Action Task Force on Money Laundering standards. In a document released by the G-20 group they explain that they will be committed to implement these rules on virtual currencies.

The document said:

“We commit to implement the FATF standards as they apply to crypto-assets, look forward to the FATF review of those standards, and call on the FATF to advance global implementation. We call on international standard-setting bodies (SSBs) to continue their monitoring of crypto-assets and their risks, according to the mandates, and assess multilateral responses as needed.”

The world is moving towards the implementation of these standards, which will allow the cryptocurrency market to gain legitimacy and receive more investors. The FATF will be reporting to the G-20 on how countries are moving into this direction. Additionally, what Bithumb is doing, is part of these efforts to be internationally compliant.

“We ask the FSB, in consultation with other SSBs including CPMI and IOSCO, and FATF to report in July 2018 on their work on crypto-assets,” reads the document released by the G-20 members.

All over the world, different countries are implementing regulations on the cryptocurrency market and crypto-related activities. The main intention is to provide a clear legal framework for enterprises, individuals and institutions to operate.

Other countries like China or South Korea, have decided to take stricter measures on the market. China has totally banned cryptocurrency trading activities and Initial Coin Offerings. At the same time, South Korea has imposed severe rules for virtual currency exchanges and investors that want to participate in the crypto market.

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