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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.

Do you think cryptocurrency can eradicate the corruption that has become endemic in Football? Let us know your thoughts in the comment section below.

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Bitcoin May Fall to $2,500 Before it Rebounds

The price of Bitcoin continues to take a tumble. The number one cryptocurrency according to market capitalization continues to experience a tumultuous 2018. One expert even predicts that BTC may bottom out at $2,500 as the crypto market continues to struggle.

Bitcoin Hovers Above $6,000

More than a week ago, BTC dropped $1,000 (from $7,700 to $6,700) in the space of a few hours as a wave of selloffs hit the market. The period coincided with the Coinrail hack as well as the U.S. government demand for information from top exchange platforms on suspicion of price manipulation.

In the past few days, BTC has experienced some degree of recovery, but all that was wiped away on June 21 as prices fell below $6,500. At the time of writing this article, Bitcoin is trading slightly above the $6,100 with a seven percent decline in the last 24 hours.

Signs of Bottoming as Bitcoin Selling Becomes Exhausted

In a recent CNBC article, Bill Baruch, the President of Blue Line Futures said that Bitcoin is approaching its bottom level. According to him, there are signs that the volatility of the market is “depressed.” Baruch also revealed that the BTC sales market has become supersaturated.

Fears of two back-to-back cryptocurrency exchange hacks may have pushed retail investors over the edge. The market is to stranger to panic selling at the slightest hint of a crisis. Conversely, Janine Wolf of Bloomberg declared recently that there is no end in sight for the current downtrend, saying:

According to the Directional Movement Index, bitcoin is on its strongest negative trend since the sell-off earlier this year. The index’s ADX line is currently at 39.3. Anything above 25 is considered a strong trend. Meanwhile, the index’s DVAN trend line, a divergence analysis that measures buying or selling pressure, is also giving off ominous signals.

Bitcoin Can Fall to $2,500 and Still Rebound to $14,000

No matter the extent to which BTC falls, experts like Luis Carranza, the founder of London Fintech Week believes Bitcoin will bounce back, saying:

Crypto is unpredictable. There are massive spikes and drops. $4500 could be the bottom, but nothing is preventing $2500 from being the bottom.

Bitcoin optimists point to the emergence of regulatory clarity and the influx of institutional investments as reasons why BTC will recover. Commenting on the role of clear regulations in the market, Gavin Pannu of the London Academy of Trading said:

Central Bankers have been quiet during the cryptocurrency bull-run and have been doing their due diligence with research and white papers carried out by regulators and experts in the field, and the market is anticipating an optimistic view from Central Banks. Regulating cryptocurrency would ease investors’ concerns.

On the subject of institutional money coming into the market, experts like Matthew Newton of eToro believe it breathes new life into the industry. According to Newton, the presence of large investors in the market is an “important development” in the crypto world. Notable names like Goldman Sachs and Nasdaq have made significant inroads into cryptocurrency in recent months. However, Newton believes that the proper regulations will make big money flow into the market, saying:

For institutions to fully commit, they’ll need more structured products and some sort of regulatory oversight. Reputational risk is a big issue for them, as is overcoming the media skepticism. Once an appropriate regulatory framework is in place, big-ticket money is likely to follow suit swiftly.

What is your Bitcoin bottom price prediction? Do you think BTC will attain the heights reached in late 2017? Keep the conversation going in the comment section below.

Image courtesy of the CoinMarketCap.

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Bithumb To Fully Compensate Investors after Hack

Right after Bithumb confirmed it had been hacked via twitter, the exchange would also announce on the same platform that it would compensate all affected users on its exchange. The announcement was later retracted from the platform. The announcement read as follows before it was deleted:

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

However, the exchange has since confirmed that it would be compensating users on any lost funds. The new announcement was also made via twitter by the exchange.

The Bithumb team also announced that it reported the issue to KISA (Korea Internet and Security Agency) for further investigations.

After the incident occured on June 20, Bithumb quickly followed the procedure to immediately report [the] incident to KISA announcing that about 35 billion Korean Won worth amount of cryptocurrency was stolen. However, as we undergo recovery process on each cryptocurrency, the overall scale of damage is getting reduced. Hence, we expect that the overall damage will be less than the amount we initially expected.

The team has also confirmed that it had lost $30 Million in the hacking, but its developers and security team have started the recovery process of the stolen customer assets. Together with KISA and a sub-organization of the Ministry of Science and ICT, the developers and security experts have found a method of recovering a portion of the stolen funds.

The major challenge by all crypto exchanges, is protecting user funds as explained by Dr. Robert Statica to Ethereum World News. Dr. Statica was quoted as saying:

Exchanges have to take immediate & drastic cybersecurity measures but also look at how the coins & wallets are protected in transit and at rest.

Unless changes are being made right away, the attacks and their magnitude will intensify both in frequency and volume.

He also added that the solution was that…

Wallets and exchanges should employ a strong 2-factor authentication (2FA) protocol on top of the end to end encryption of the communication between the user’s device and the exchange.

Wallets and Cryptocurrencies must be protected in a way that coins  belonging to a particular user and wallet cannot be stored in another user’s unauthorized wallet. This type of protection would have solved all of the hacks that happened, so far, in which coins were extracted from exchanges or directly from users wallets.

Multiple layers of encryption (both in transit and at rest) combined with user and wallets authentication techniques and at the minimum 2FA enforced for all account holders are a must to reduce the attack vectors.

In conclusion, the act by Bithumb to compensate losses incurred by users is a welcome relief for all traders within and outside the exchange. This hack, and others before, will be vital in offering lessons in enhancing the security of all cryptocurrency exchanges.

[Photo source, ccn.com]

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Bitcoin Transaction Fees Spike as Bithumb Hurriedly Tries to Clear its Hot Wallet in the Wake of the Recent Hack

Bitcoin transaction fees are currently triple their value less than 24 hours ago. Also, there are reports of transaction backlogs as the network appears congested.

Bitcoin Transaction Fees Triple in Less than 24 Hours

At the time of writing this article, the average BTC transaction fee is $2.75. This figure is more than triple the cost per transaction yesterday. In fact, BTC fees haven’t crossed the $1 mark for most of 2018.

According to Sergej Kotliar, the CEO of Bitrefill, the reason for the spike in BTC transaction is because Bithumb is hurriedly trying to clear out its hot wallet. Bithumb, a South Korean cryptocurrency exchange platform recently suffered a cyber-attack. The hackers stole more than $30 million in cryptos.

Explaining the situation, Kotliar said:

Possibly related to their [Bithumb] hack would explain them overpaying 100x on fees for consolidation. This does put [a] strain on the whole network, and everybody’s fee estimators.

Miners usually prefer to mine the blocks with the highest fees first. With Bithumb seemingly desperate to move funds quickly, it appears their transactions are being given priority attention. This situation leaves other “normal” transactions in temporary limbo.

Kotliar, however, does not think the situation will last for too long, saying:

This is a temporary thing. Will likely have blown over tomorrow, two days at most. This is not a repeat of December/January.

Another Twitter account, “WhalePanda” had this to say about the situation:

Bithumb is paying crazy fees to consolidate everything now (assuming it’s not the hacker), driving up the overall fees for everyone on the network. Is this a problem? No, not really. It’s definitely annoying, but not really a problem, it’s temporary.

In December 2017 all the way to the beginning of February 2018, Bitcoin transaction fees reached record levels. Also, the network was bogged down by slow confirmation times which regularly reached more than 20 hours per transaction. However, the introduction of protocol upgrades like SegWit and Lightning Network significantly reduced fees on the network.

The Curious Case of the Bithumb $28 Million Tax Fine

Less than a fortnight ago, Bithumb was cleared of tax evasion charges in South Korea. However, the platform still incurred a $28 million tax bill for unpaid taxes. In the early hours of Wednesday, 20 June 2018, reports emerged that the platform had been hacked to the tune of $30 million. The proximity between the two events has caused some in the crypto community to suspect some foul play.

The platform hasn’t revealed which of the coins in its holdings were affected by the hack. Bithumb has even deleted a few tweets about the hack leading to a few raised eyebrows of people monitoring the situation

Do you think the current spike in BTC transaction fees is a temporary anomaly? What are your views on the Bithumb hack happening so close to its $28 million tax fine? Keep the conversation going in the comment section below.

Images courtesy of Twitter (@ziggamon and @WhalePanda).

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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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