South Korean Cryptocurrency Exchange Goes Bankrupt After Being Hacked

South Korean Cryptocurrency Exchange Goes Bankrupt After Being Hacked. South Korea has been one of the world’s top countries for the trading of cryptocurrencies. The popularity of the field has also made South Korean markets vulnerable to hacking. One major exchange in the country has been shut down as a result of hacking activities and will declare bankruptcy.

The Youbit exchange has announced that it will be declaring bankruptcy after having been hacked into for the second time this year. The exchange lost about 17 percent of its assets in a hacking attack.

This comes a few months after another hack where close or 4,000 bitcoins were stolen. This totaled nearly 40 percent of the assets the exchange held. This was prior to the bitcoin’s massive rise in value.

Details on who could have orchestrated these two hacks are unclear. Youbit had blamed the first hack on North Korea. Youbit did not state any blame for the second attack.

Youbit stated that it would be declaring bankruptcy following the second hack and will close all trades. All deposits and withdrawals will be suspended although people who have accounts with Youbit will still be able to take out their funds or transfer them to other exchanges. However, all cryptocurrency assets that people hold will be marked down by 25 percent.

Youbit will be using its business insurance policy to cover some of the damages. But the firm will be selling off many of its assets in the bankruptcy process. Details on which assets will be made available are unclear at this time.

Additional Details

Youbit had been in operation since 2013. It worked with the bitcoin and Ethereum as vital assets for trading among many other particular cryptocurrencies of value.

The work from Youbit came as South Korea has grown into being one of the world’s top places for investing in cryptocurrencies. It is estimated that nearly a million people in South Korea invest in the bitcoin in some form. The bitcoin is popular enough in South Korea to where it is about 20 percent higher in value in the country than it is in the United States, the second-largest investor in the currency. Also, about 20 percent of all bitcoin transactions in the world are conducted in South Korea.

But as the bitcoin and other digital currencies have grown in popularity, there have been increasing concerns over how digital exchanges might be at risk of being hacked. This is due to many currencies increasing in value with the bitcoin being the most significant of those currencies to look into.

There have also been concerns about how the bitcoin and other similar currencies can be regulated in South Korea. Financial regulators in the country have banned many large banks from dealing with virtual currencies. This comes amid the ongoing fear that the cryptocurrency market is a massive bubble which is extremely fragile and difficult to predict.

The closure of Youbit marks the first time that a cryptocurrency exchange in South Korea has gone bankrupt. People in the country will have other options to work with when finding exchanges for trading in the future.

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