What the Korea's Crypto Scene Is Saying about Exchange hacks
The Korean cryptocurrency community speaks out about the recent exchange hacks
The past two weeks have seen two South Korean exchanges get attacked and robbed, sparking commentary and critique among the country's local cryptocurrency community.
It began with the Coinrail hack on June 9. At the time, the popular South Korean cryptocurrency exchange tentatively announced a "cyber intrusion" that saw the loss of $40 million worth of cryptocurrencies.
The exact number and amount of tokens taken from the exchange have yet to be confirmed by the company itself, though a third-party firm assisting Coinrail gave a few estimates in a blog post the following day.
If that wasn't enough, on June 20, Bithumb – South Korea's largest by trade volume – also announced a major security breach in which $31 million was reported to be lost. In a post published on their official website the same day, Bithumb reassured customers that their assets were now securely stored in offline "cold" wallets unreachable to hackers and the stolen funds would be fully reimbursed.
Combine this environment with a recent bearish market trend taking the price of bitcoin down in a way not seen since 2014 and you get the kind of social media uproar that questions just about everything.
As one Korean cryptocurrency skeptic tweeted:
"Anyone would look at this and see it as an insider act, no? Please catch the culprit and restore the platform back to the original state as soon as possible…You said there is no vulnerability of being hacking in an advertisement. Are you joking me right now?"
Digging Deep
For most, it's not a matter of tech security – that's a given for those that care – but rather about the people who operate the exchanges behind the scenes.
As @leejongsul78 puts it:
Bitcoin Gold Hit by Double Spend Cyber Attack
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A malicious miner successfully executed a double spend attack on the Bitcoin Gold network last week, making BTG at least the third altcoin to succumb to a network attack during that timespan.
Bitcoin Gold director of communications Edward Iskra first warned users about the attack on May 18, explaining that a malicious miner was using the exploit to steal funds from cryptocurrency exchanges.
To execute the attack, the miner acquired at least 51 percent of the network’s total hashpower, which provided them with temporary control of the blockchain. Obtaining this much hashpower is incredibly expensive — even on a smaller network like bitcoin gold — but it can be monetized by using it in tandem with a double spend attack.
After gaining control of the network, the attacker began depositing BTG at cryptocurrency exchanges while also attempting to send those same coins to a wallet under their control. Ordinarily, the blockchain would resolve this by including only the first transaction in the block, but the attacker was able to reverse transactions since they had majority control...