Cryptocurrencies tumble after South Korea hack

June 11, 2018 | 14:07

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Cryptocurrencies plunged in Asia on Monday (Jun 11) after a hack on a South Korean exchange sparked fresh concerns about the safety of the digital units.

cryptocurrencies tumble after south korea hack

Bitcoin was among a number of cryptocurrencies that plunged in Asian trade following news of the hack on South Korean exchange Coinrail. (Photo: AFP/Jack Guez)

The attack on Coinrail comes months after Japanese firm Coincheck said it had lost more than US$500 million in a January hack.

Coinrail did not specify the value of the currency that was taken in the attack at the weekend but said it was working with authorities and other coin developers to track down the culprits.

The firm, which trades more than 50 cryptocurrencies, added that it had frozen all exposed coins - Fundus X, Aston, and Enper - and other units had been taken offline in a "cold wallet".

The news sent cryptocurrencies tumbling, with bitcoin losing about 13 per cent, ethereum down 12 per cent and ripple almost 20 per cent lower as traders fret over the safety of their investments.

"This is 'If it can happen to A, it can happen to B and it can happen to C,' then people panic because someone is selling," said Stephen Innes, head of Asia-Pacific trade at OANDA.

"The markets are so thinly traded, primarily by retail accounts, that these guys can get really scared out of positions," he said. "It actually doesn't take a lot of money to move the market significantly."

Cryptocurrencies have plunged since the end of 2017, when bitcoin hit a record high near US$20,000, having surged from less than US$1,000 just 11 months earlier. The unit is now worth around US$6,780.

South Korea is one of the biggest markets for trading in digital currencies but the boom in their popularity has forced the government to tighten regulations, following similar moves in other countries.

Japan in February carried out raids on a number of exchanges following the Coinbase hack, which exceeded the US$480 million in virtually currency stolen in 2014 from another Japanese exchange, MtGox.

AFP

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