Major Korean Crypto Exchange Bithumb Prosecuted For Failing to Protect its User’s Data

Based on a recent report, South Korean crypto exchange Bithumb which failed to take precautions to keep personal information safe is now being prosecuted. The exchange is accused of allowing hackers to use its user’s information to steal money for the platform.

The Data Breach Led to the Loss of About $7 Million

According to prosecutors, the violation of data which led to the loss of around $7 million in user funds will be the second time that hackers will be infiltrating the platform.

The authorities reportedly got to know about a major data invasion which originated from the computer of an anonymous employee in late June 2017 and it affected almost 31,000 exchange user accounts by leaking email addresses, crypto transaction histories, user names, and phone numbers. But customer IDs and passwords were not leaked

Since the exchange did not employ effective data security, failed to install security update software, and stored client data on the computers of its staff, it has been charged under the information protection article of Korea’s Information Communication Network Act.

Meanwhile, Bithumb has released a remorseful statement. There, the exchange apologised to its customers and promise to protect them effectively going forward. It also denied all claims by prosecutors that the data breach is directly linked to previous hacks.

Bithumb Hacked Thrice

Furthermore, in an attack which executives claimed was perpetrated by an insider, Bithumb was hacked for the third time and lost almost $13 million.

The exchange was also hacked in summer of 2018 and lost approximately $31 million but was later discovered to be $17 million.

After the attack in spring, the exchange carried out a third-party audit of its funds claiming that the stolen virtual currency (EOS tokens) belonged to the company and it had previously transferred the tokens that were left into cold wallet storage just after the incident.