Bithumb Exchange's $31 Million Hack: What We Know

On Wednesday, roughly 35 billion Korean won in cryptocurrency was stolen by hackers from the South Korea-based exchange Bithumb.

Although the breach may not be as significant as the $530 million hack of the Coincheck exchange earlier this year, the fact that Bithumb now ranks as the sixth biggest trading venue in the world still marks it as a notable, and worrying, incident.

While Bithumb has not yet disclosed details of the stolen coins bar their dollar amount, news emerged following the hack that XRP, the native token of the Ripple protocol, may have been targeted, according to reports from CoinDesk Korea and news agency Yonhap.

While Bithumb officially confirmed the breach early Wednesday morning local time, it appears that security issues were already drawing attention from the exchange at least several days ago.

According to a follow-up report from CoinDesk Korea, Bithumb conducted a security enhancement checkup on June 16, just days before the confirmed hack.

The CoinDesk Korea report indicated that the hack comes at a time when Bithumb is spending 10 billion won, or around $9 million dollars annually on security measures.

An hour before Bithumb confirmed the hack on its website and official Twitter account, the exchange reported the case to the Korea Internet & Security Agency, a government organization that supervises internet and cybersecurity issues in the country.

At that time, Bithumb later announced that it would repay each victim with 100,000 Korean won each, an amount worth about $85. Bitcoin price dips by $200. According to data from CoinDesk, the price of bitcoin dropped by nearly $200 to a daily low so far of $6,561 an hour after Bithumb initially published the statement.

As Bithumb has so far only suspended asset deposits and withdrawals, trading activity on the exchange actually appears to be increasing since the news broke.

Bithumb's hack marks the second cyber incident in the crypto industry in South Korea in recent days, and its second in less than a year.