Cyber Incident Victim: Bithumb
Date:
Jun 2018
Location:
South Korea
Summary
A South Korean cryptocurrency exchange suffered a hack resulting in the theft of approximately $31.5 million worth of virtual coins, with unauthorized access occurring during a single overnight period. The platform stored most client assets in offline cold wallets but likely lost funds from internet-connected hot wallets, prompting an immediate suspension of all trading activities. The exchange committed to fully compensating affected users, highlighting systemic security vulnerabilities in digital asset markets amid a broader pattern of global exchange breaches. This incident followed another local exchange hack and a high-profile $500 million theft at a Japanese platform earlier that year, intensifying concerns over cryptocurrency security and regulatory shortcomings despite recent anti-money laundering measures.
| CIA Posture | Motives | Tactics, Techniques & Procedures |
|---|---|---|
| Available to members | 1 motive | 3 techniques |
| Threat Actor | Type | Location |
|---|---|---|
| 1 actor | Available to members | Available to members |
Description
On June 20, 2018, South Korean cryptocurrency exchange Bithumb announced that hackers had stolen approximately 35 billion won ($31.5 million) worth of virtual coins between late June 19 and the early morning of June 20. The exchange halted all trading after confirming the theft and stated in a public notice that all clients' assets were stored in offline "cold wallets," which are not directly connected to the internet. Bithumb committed to fully compensating affected customers for their losses. The incident marked the second hack of a South Korean cryptocurrency exchange in just over a week, following the June 11 breach of Coinrail. At the time of the attack, Bithumb ranked as the sixth-largest cryptocurrency exchange globally by trading volume according to Coinmarketcap.com.
The theft drew attention to systemic security vulnerabilities in cryptocurrency exchanges, with Korea University Blockchain Research Institute professor In Ho noting the stolen funds likely originated from less secure "hot wallets" connected to the internet. ESTsecurity chief analyst Mun Chong-hyun emphasized that cryptocurrencies remain prime targets for hackers due to their anonymous nature and frequently inadequate security protections. The hack contributed to broader market declines, with Bitcoin prices dropping 1.8% to $6,612.92 on Luxembourg-based Bitstamp exchange following the disclosure. This incident occurred against a backdrop of high-profile cryptocurrency exchange breaches globally, including the $530 million theft from Japan's Coincheck earlier in 2018. South Korean regulators had implemented a ban on anonymous bank accounts for cryptocurrency trading in January 2018 to combat money laundering risks but declined to shutter domestic exchanges despite mounting security concerns. Bithumb supported trading for over 37 different cryptocurrencies at the time of the breach.