Bad news from a relatively small South Korean crypto exchange seems to have had a big effect on the prices of cryptocurrency across the board.
You may have never heard of South Korea-based cryptocurrency exchange Coinrail, but it has probably hit the value of your cryptocurrency wallets pretty hard in the last 24hrs. When the company, which barely scrapes into the Top 100 crypto markets in terms of trading volume, announced on Sunday that it had been hacked for around $40m dollars in altcoins it bought to an end two-weeks of relatively quiet consolidation in the price of Bitcoin, precipitating a big drop that has seen its price drop back below the $7,000 mark.
While no details on the hackers methods were given, a message posted on Coinrail’s site (translated here) – which was taken down for maintenance by its staff as soon as the hack was detected (and remains down at time of writing) – told visitors that it had been robbed of altcoins Pundi X (NPXS), NPER (NPER), and Aston (ATX). The theft, it says, amounts to around 1/3 of its total reserves, with a report from Bleeping Computer saying “users on a prominent Bitcoin forum tracked down some of the hacker’s alleged addresses and believe he/she/they might have stolen funds worth between $30 and $40 million”.
The report goes on to say that around half of that total is NPXS – the exchange’s most-traded altcoin. Coinrail says its is working with the developers of the affected coins to recover them, and with various exchanges to freeze wallets where it believes the coins were placed – and estimates around 2/3rds could be frozen or recalled. The rest of Coinrail’s assets have been moved to a cold storage wallet away from further potential attacks.
While the attack was relatively minor – certainly compared to the Coincheck affair of last year – and did have a disproportionate effect on the price of the headline cryptocurrency, and those below it. Wiping of 10% pretty much across the board, and – at least temporarily – wiping away any hope of a continued recovery of the BTC price from it’s April lows, and taking it back down very close to those levels.