South Korean Exchange Coinrail Hacked, $40 Million in Crypto Reported Stolen

South Korean cryptocurrency exchange Coinrail reported a hack on its website during the early morning hours of June 10, 2018. The thieves allegedly made off with over $40 million worth of altcoins and assorted tokens.

Executives announced that roughly 30 percent of the tokens the exchange was housing have been taken, which amounted to nearly $20 million worth of NPXS (Pundi X) tokens, $14 million of Aston X, $6 million in tokens for Dent and over $1 million TRON. At press time, an investigation is underway, and law enforcement officials are working to figure out who was behind the attack.

Coinrail states:

“Seventy percent of total coin and token reserves have been confirmed to be safely stored and moved to a cold wallet [not connected to the internet]. Two-thirds of stolen cryptocurrencies were withdrawn or frozen in partnership with related exchanges and coin companies. For the rest, we are looking at it with an investigative agency, related exchanges and coin developers.”

Coinrail’s daily trading volume is roughly $2.5 million. Though it is technically one of the smaller digital currency exchanges, Coinrail still ranks among the top 100 across the globe according to Coinmarketcap.com. Still, Kim Jin-Hwa of the Korea Blockchain Industry Association describes the company as a “minor player” and says he can “see how such exchanges with lower standards on security levels can be exposed to more risks.”

The Coinrail hack is the fifth major theft this year. Trouble began in January after nearly half-a-billion in cryptocurrency was stolen from popular Japanese exchange Coincheck. BitGrail in Italy was hit in February, which resulted in over $200 million worth of cryptocurrency disappearing in just a matter of minutes. Coinsecure was the third victim, and saw over $3 million worth of bitcoin stolen from its wallet last April.

In addition, an attack occurred just last week on Japan’s Shopin, a universal shopper profile based in Japan. One of the company’s token distributors was recently hacked and saw roughly $10 million in assorted tokens disappear overnight. The distributor lead kept all tokens in hot wallet storage despite warnings from Shopin executives, who claim she was even sent instructional videos regarding the kinds of wallets that should be used.

“Investors have been increasingly worried about cybersecurity issues,” says Adrian Lai, founding partner at Hong Kong-based investment firm Orichal Partners. “At this stage, obviously, the standard is not high enough.”

At press time, bitcoin is trading for roughly $6,700 — about $900 less than where it stood just 48 hours ago. Ethereum has also dropped from about $602 to $521.