Crypto Exchange Bithumb Hacked for $13 Million in Suspected Insider Job

South Korean crypto exchange Bithumb has had over $13 million in EOS stolen in a hack, but says customer funds are safe.

AccessTimeIconMar 30, 2019 at 10:45 a.m. UTC
Updated Aug 18, 2021 at 11:05 p.m. UTC

Presented By Icon

Election 2024 coverage presented by

Stand with crypto

Update (09:30 UTC, April 1, 2019): According to a report from CoinDesk Korea, Bithumb may have also lost 20.2 million XRP in the recent breach. The XRP, worth $6.2 million at current prices, was moved from Bithumb's wallet on March 29 in transactions that can be seen on XRPSCAN. The exchange is not yet confirming or denying the report.

The odds of Bithumb managing to retrieve the stolen funds may be small, according to crypto security expert Cosine Yu, co-founder of security firm SlowMist. The hacker has already managed to “launder” most of the stolen EOS and XRP, Yu said, meaning the assets have been transferred to a large number of addresses that are not necessarily owned by any exchanges.

  • Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
    13:18
    Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
  • Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
    05:10
    Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
  • The first video of the year 2024
    04:07
    The first video of the year 2024
  • The last regression video of the year 3.67.0
    40:07
    The last regression video of the year 3.67.0
  • “The laundering strategy this time is clever as the theft did not send most of the funds directly to addresses owned by exchanges. ... So it’s almost impossible for Bithumb to retrieve these funds,” Yu told CoinDesk. 


    South Korean crypto exchange Bithumb has had around $13 million in the EOS cryptocurrency stolen in a hack it suspects was an insider job.

    The company confirmed in statement on Saturday that it first spotted an “abnormal withdrawal” of the cryptocurrency through its monitoring system at 22:00 Korean time (13:00 UTC) on Friday, March 29.

    The exchange suspended asset withdrawals and deposits on the platform after noticing the breach.

    Bithumb stated:

    "All the [stolen] cryptocurrency is owned by the company, and all members' assets are under the protection of a cold wallet."

    According to a report from CoinDesk Korea, the exchange was hacked for a total of 3.07 million EOS, which was withdrawn from the exchange’s "hot" (internet connected) wallet through a series of transactions.

    Based on the data from CoinMarketCap, EOS is currently trading at $4.22, making the total value of the coins lost around $13 million.

    The company said in its statement that it suspects the hack was conducted by an insider, since no evidence of external exploit has been found.

    Bithumb has already notified government agencies and is conducting an internal investigation. It said it's also working with major exchanges with the expectation of recovering some of the funds.

    Additionally, the remaining assets in Bithumb's hot wallet have been removed to its cold (offline) wallet to prevent further losses until the manner of the breach has been identified and any vulnerabilities fixed.

    According to CoinDesk Korea, Lee Sang Sun, described as one of the only EOS arbitrators in South Korea, said, "Overseas exchanges such as Bitfinex manage their EOS wallets with a multisig system, but Bithumb managed its with a single key." However, this detail is not confirmed at press time.

    The news comes nearly a year after Bithumb was hacked for some $30 million-worth of cryptocurrencies. The exchange experienced an initial loss of 2,016 bitcoin, 2,219 ether and other coins, but later claimed to have retrieved $14 million-worth of the hacked funds.

    Editor's note: Some statements were translated from Korean.

    Bithumb image via Shutterstock

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information have been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. CoinDesk has adopted a set of principles aimed at ensuring the integrity, editorial independence and freedom from bias of its publications. CoinDesk is part of the Bullish group, which owns and invests in digital asset businesses and digital assets. CoinDesk employees, including journalists, may receive Bullish group equity-based compensation. Bullish was incubated by technology investor Block.one.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.