Cryptocurrency exchange, Bithumb, officially confirms $30m theft, to pay full compensation to investors

Bithumb, South Korea’s biggest cryptocurreny exchange, has finally confirmed $30 million was stolen from its exchange following a hack attempt, saying that the amount could decrease after various recovery efforts.

On June 20, Bithumb had retracted its announcement that $30 million was hacked from its exchange, leading investors to panic. The Bithumb team stated on several social media platforms that the exchange fell victim to a hacking attack and lost about $30 million in digital assets.

The statement read: “We checked that some of cryptocurrencies valued about $30,000,000 was stolen. Those stolen cryptocurrencies will be covered from Bithumb and all of assets are being transferring to cold wallet.”

However, almost immediately after the announcement was released, Bithumb retracted its statement without providing any clarification on the situation.

To several users, a Bithumb spokesperson said that the company retracted the statement because it was advised by regulators to conduct a comprehensive investigation into the security breach first before releasing an official statement.

Thursday, the Bithumb team officially confirmed that it has lost $30 million in its hacking attack and its developers and security team have started the recovery process of customer assets.

“After the incident occured on June 20, Bithumb quickly followed the procedure to immediately report [the] incident to KISA announcing that about 35 billion Korean Won worth amount of cryptocurrency was stolen. However, as we undergo recovery process on each cryptocurrency, the overall scale of damage is getting reduced. Hence, we expect that the overall damage will be less than the amount we initially expected,” the Bithumb team said.

The $30 million figure provided by Bithumb is an estimate of the amount of funds that were vulnerable to the breach. After an investigation it conducted with The Korea Internet & Security, a sub-organization of the ministry of science and ICT, Bithumb developers and security experts found a method to recover a portion of the stolen funds.

As the demand for cryptocurrency and digital has started to increase rapidly and intensify, industry experts and regulators have asked investors to utilize major cryptocurrency exchanges like Bithumb, UPbit, and Korbit to avoid hacking attacks and security breaches.

The recent Bithumb hacking attack has demonstrated the importance of utilizing major cryptocurrency exchanges because the company has officially stated that it will fully compensate the losses of its investors with company funds.

“Bithumb has been administering company’s asset and customers’ asset, and all customers cryptocurrencies, as well as KRW asset, are safely stored on cold wallet and bank respectively. Moreover, we would like to ensure that Bithumb currently has about 500 billion KRW worth of company’s fund. The amount of damage that occured this time will be fully covered by Bithumb’s own company fund.”

By the end of 2017, Bithumb disclosed its cryptocurrency holdings to be over a billion dollars and its net profit in 2017 to be around $300 million. On June 21, Bithumb revealed that it currently has about $450 million in company fund at its disposal and it will be able to compensate investors with ease once the investigation comes to an end.