Bitcoin Price Drops As Coinrail Suffers A Cyber Attack

Bitcoin Price Drops As Coinrail Suffers A Cyber Attack

Bitcoin experienced a more than 10% drop in its value over the weekend after reports of a South Korea exchange, Coinrail, being hacked. This is the lowest it has been in two months.

Bitcoin is, however, not the only Cryptocurrency to be affected, others like Ethereum, Pundi-X etc. also felt the effects of the hack, all collectively losing more than $42 million. Ethereum prices fell to $533, an eleven percent drop.

Forty Million Worth Of Coins Lost

Coinrail Suffers A Cyber AttackIn its homepage, Coinrail reported having lost Pundi-X, Nper, and Aston in the hack. This coin inventory was reportedly worth forty million dollars, thirty percent of the overall coin inventory.

According to the exchange, to arrest the situation seventy percent of the remaining Cryptocurrency holding are being held in what is termed a cold wallet. This, essentially, is a computer that is not connected to the Internet. This is meant to shield the coins from being hacked again.

According to reports from Coinrail, of the thirty percent that was stolen, two-thirds have already been frozen or covered. This means that around ten percent of the hacked Cryptocurrency can be confirmed as stolen.

The Fall In Bitcoin Price

The Fall In Bitcoin PriceEven though Coinrail did not directly mention Bitcoin as one of the Cryptocurrencies lost in its public statement, it experienced a drastic fall in prices.

On Sunday Bitcoin had a value of $6,647.33, signifying its lowest price since April. Coinciding with this was reports of a significant Bitcoin sell-off.

A Wall Street Journal report is rumored to be the main reason for the Cryptocurrency prices. The report stated that four Cryptocurrency exchanges were under investigation for allegedly manipulating Cryptocurrency prices.

The CME said that with the inclusion of the four under investigation (Bitstamp, Coinbase, itBit, and Kraken), all exchanges that contribute to the Bitcoin Reference Rate are to furnish information and be cooperative with the regulators.

Not The First Hack

Coinrail is not the first Cryptocurrency exchange to fall victim to a hack. Back in January, Coincheck Inc., a Japanese exchange fell victim and lost close to $500 million worth of coins. Other high profile hacks of the past include:

Mt. Gox – this company faced two major hacks. At the time of the first hack, Mt. Gox was arguably the biggest Bitcoin exchange, facilitating up to seventy percent of Bitcoin exchanges. In the first attack, Bitcoin prices fell to a record cent on the exchange while on the second attack close to half a billion dollars was stolen.

Bitfinex – this was the second biggest hack to befall Bitcoin. The Hong Kong-based exchange fell victim to a one hundred and twenty Bitcoins heist that was reportedly worth seventy-two million dollars.

NiceHash – in December last year, the Slovenian based company lost four thousand seven hundred Bitcoins, reportedly worth eighty million dollars to a Cryptocurrency heist.

The DAO – In 2016, Ethereum was hacked resulting in a fifty million dollar loss. The hack was however not caused by any fault in Ethereum itself. A loophole in the DAO (Decentralised Autonomous Organisation) made it possible for the hacker to siphon close to two-thirds of the funds held in the DAO.

June 11, 2018

About Author

Samantha Mitchell