YouBit Exchange Shutters After Second Hack – South Korean Venture Lost More Than $70 Million

Crime, Investing, News | December 19, 2017 By:

YouBit, a cryptocurrency exchange in South Korea, has been hacked for the second time and is being forced to shut down.

The South Korean venture has filed for bankruptcy after the losses, but said to its users that they would get 75 percent of the value of their holdings. The exchange claims the second hack attack cost it 17 perent of its assets, but did not say when the second hack occurred. Bitcoin and other cryptocurrencies have lately had extreme price run-ups, making the “when” on the hack crucial.

Last April,  Youbit, formerly called Yapizon, lost 4,000 bitcoins, now worth more than $73 million, in its first hacking attack.

The South Korean Internet and Security Agency Kisa, in charge of Internet crime, is investigating. It originally blamed the April attack on North Korea, which has been active in cyber attacks on various exchanges.

YouBit said that hackers did not steal all of the assets because they were lodged in a cold wallet.

Leigh-Anne Galloway of security firm which vetts and protects initial coin offerings, said Youbit’s announcement “is simply another example of the devastating consequences of getting security wrong. While the exact details of the attacks on Youbit are unknown, an examination of other cryptocurrency attacks over the year suggest that organizations need to start with the basics. First, server infrastructure and the applications that host cryptocurrencies need to be seen as a security risk, as this is a vector for attack we have seen time and time again. No matter how secure a currency is, if the web application, mobile application, server or network the currency operates on is vulnerable, the contents are at risk. Second, there needs to be a greater focus on preventing social engineering attacks – protecting against website clones and educating users to avoid malicious websites and apps as quick as possible.