Bithumb Hack: Exchange Informs User’s Funds Are Safe; Employee Embezzlement Suspected?

Bithumb Hack

Bithumb Hack: Exchange Informs User’s Funds Are Safe; Employee Embezzlement Suspected?

Bithumb, one of the leading Cryptocurrency Exchanges in South Korea has experienced another hack. Bithumb reported on Saturday 30th March 2019 that while the user’s funds were safe from an outside infiltration, an ‘internal embezzlement incident’ has been suspected. Funds have reportedly been stolen from the company’s ‘hot wallet.’

On 29th March, the transaction monitoring system of the Exchange detected ‘abnormal withdrawal’ from the Exchange Wallet. The cryptocurrency wallet from which the funds were stolen is still unclear. The Exchange has registered a formal report with KISA, Cyber Police Agency and security companies, and is also conducting an internal inquiry into the matter.

The Exchange Confirms That User’s Funds Are Secure

While there was an “abnormal” activity suspected at the Exchange, the officials assured its users their funds are safe. According to the report released by Bithumb on 30th March 2019, the unusual activity was observed on 29th March. After the Bithumb monitoring system suspected the attack, Bithumb suspended withdrawals and deposits temporarily for the entire exchange as a measure to safeguard the funds.

The announcement by Bithumb stated that:

We would like to inform you of the circumstances of the grounds and confirm that your assets are safe.

The report also said that the cryptocurrencies were stolen from the company’s hot wallet. The user’s funds were still secure in the cold wallet of the exchange.The press release included: 

All the spilled cryptocurrency is owned by company, and all the member’s asset is under the protection of cold wallet.

The Exchange has implemented multi-signature wallets for the Exchange cold wallets to account for unforeseen circumstances like the QuadrigaX issue. The exchange has also obtained certification from the Information Security Management System (ISMS).

Internal Hack Sparked by Lay-Offs?

Bithumb had announced on 19th March that it would lay-off more than 50% of its employees due to ‘voluntary retirement’ being asked by certain employees. However, the exchange volume is significantly affected since 2017 as the trading volume has decreased by more than 95% since December 2017.

Moreover, the internal issue sparked just days after the announcement suggests that the Exchange might be suffering a substantial Human Resource management issue.

Nevertheless, the deposit and withdrawal of the exchange are suspended while the internal workforce verification system is trying to safeguard all of the company’s assets.

The Exchange reassured its customers in the announcement that “We will do our best to protect the assets of the customer”

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Bithumb Hack: Exchange Informs User's Funds Are Safe; Employee Embezzlement Suspected?
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Bithumb Hack: Exchange Informs User's Funds Are Safe; Employee Embezzlement Suspected?
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Bithumb, one of the leading Cryptocurrency Exchanges in South Korea has experienced another hack. Bithumb reported on Saturday 30th March 2019 that while the user's funds were safe from an outside infiltration, an 'internal embezzlement incident' has been suspected. Funds have reportedly been stolen from the company's 'hot wallet.' 
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Author: Nivesh Rustgi

Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com

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Nivesh Rustgi 715 Articles

Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com

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