Business 12 June 2018

Erik Gibbs

South Korea’s Coinrail becomes target of hackers, loses $40M

Coinrail is the world’s 98th-ranked cryptocurrency exchange, according to data from CoinMarketCap. However, a hack of its platform on Sunday will most certainly cause it to drop a few notches, or can see its complete removal. The South Korean exchange confirmed that it was the target of a hack on Sunday that saw it lose more anywhere from $37 million to more than $40 million worth of crypto.

Following the intrusion, Coinrail took action to shut down the platform to prevent more damage, but not before losing a significant amount of NPXS, ATC and NPER tokens. There also is evidence that around $13.8 million in ATX and $6 million in DENT was stolen, as well as coins from other projects such as Jibrel Network, Kybrel Network, Storm, TRX and B2BCoin. NPXS, an ERC20 token offered by Pundi X, took the brunt of the attack, losing somewhere around $19.5 million with the theft of 2,619,542,080 NPXS tokens.

The hacker or hackers didn’t waste any time trying to move their ill-gotten funds. According to reports, the thief tried to unload some of the NPXS token, 26 million to be exact, on IDEX, a decentralized ERC20 exchange. IDEX froze the coins before they could be exchanged and Pundi X has also implemented its only “emergency security protocol” that will halt all NPSX transactions as of midday Sunday. Pundi X stated that the theft represented 3% of its total supply.

Coinrail stated that it has now moved 70% of its total reserves into an offline cold storage, while two-thirds of the other 30% have been frozen or recalled and the “remaining one-third of coins are being investigated with investigators, relevant exchanges and coin developers.”

South Korean companies operating within the cryptocurrency and blockchain ecosystems created a self-regulatory group, the Korean Blockchain Industry Association, about six months ago. However, according to a representative of the group, Kim Jin-Hwa, “Coinrail is not a member of the group that promotes self regulations [sic] to enhance security. It is a minor player in the market and I can see how such small exchanges with lower standards on security level can be exposed to more risks.”

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

Bitcoin Satoshi Vision (BSV) is today the only Bitcoin project that follows the original Satoshi Nakamoto whitepaper, and that follows the original Satoshi protocol and design. BSV is the only public blockchain that maintains the original vision for Bitcoin and will massively scale to become the world’s new money and enterprise blockchain.

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