The value of Bitcoin fell sharply after a South Korean cryptocurrency exchange said it suffered a “cyberintrusion” and had been hacked.
Bitcoin dropped more than 10% over the weekend, falling below $6,700 a unit, according to research site CoinDesk. The largest cryptocurrency has lost more than half its value so far this year – dropping by nearly two thirds from its record high near $20,000 last December. Its low for the year came in February at less than $6,000.
The latest decline came after a small exchange called “Coinrail” said Sunday that several so-called “alt coins” — alternative versions of Bitcoin — appeared to have been stolen in a coordinated hack. Coinrail said 70% of its digital assets have been moved to what is known as a cold wallet — storage that isn’t connected to the Internet — and that it is working with authorities on finding the lost assets.
South Korea is a hotbed for cryptocurrency trading. But Coinrail is small relative to its competitors. Before the attack, Coinrail ranked near the bottom of the 100 biggest cryptocurrency exchanges in the world by trading volume. South Korean regulators have taken a tough stance in trying to tame the cryptocurrency market, which is one of the world’s busiest as measured by trading volume.
Exchanges in South Korea have a history of being hit by cyberattacks. But hacking has been a problem for the cryptocurrency markets worldwide. In January, Japanese exchange Coincheck Inc. was attacked and a small Italian exchange called BitGrail was hit in February. Since 2014, exchange hacks have cost investors at least $1.4 billion, according to an analysis conducted by The Wall Street Journal newspaper.