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June 11, 2018

South Korean cryptocurrency exchange loses $40 million in hack

by John_A

Tech Crunch reports that South Korean cryptocurrency exchange Coinrail has lost roughly  $40 million worth of tokens in a recent hack. The stolen currency was a mixture of alt-coins, cryptocurrencies which aren’t as big as the likes of Bitcoin.

The hackers managed to steal nearly $20 million worth of NPXS tokens which were issued by Pundi X’s initial coin offering. They also made off with $13.8 million from Aston X which is a company working to create a platform to decentralize documents. Finally, they stole $5.8 million in tokens from Dent and $1.1 million in Tron, a newer currency originating in China.

That data comes from the wallet address of the alleged hacker who also managed to get away with smaller amounts of coins from five other cryptocurrencies.

It is worth noting that the organizations which issued the coins were not hacked. Instead, the coins were taken from Coinrail’s users. Coinrail has not commented on whether or not it will refund the affected users. When a similar hack affected Japan’s Coincheck exchange, the company offered refunds to the affected customers.

While Coinrail has not commented on the matter of refunds, it has issued a statement addressing the hack. The company has taken its service offline and moved its remaining assets to cold storage while it deals with the matter.

Several of the companies whose coins were hacked have also issued statements and pledged to take action against the hacker. Pundi, which says the hacker stole 3 percent of its tokens, has frozen the stolen tokens. It has also ceased all trading of its tokens across various exchanges to help with the investigation which now involves the Korean authorities.

NPER, which lost $860,000 in the hack, says it has frozen the stolen coins and plans to incinerate them so the thief will get no value out of them.

While the coins may be of no use to the hacker, that is likely to be of little comfort to the victims of this crime. Unfourantely, as is often the case with cryptocurrencies, they have little in the way of legal recourse. The field remains unregulated meaning there is no system to insure these currencies in the event of a theft.

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