Leaked Bitkoex data underlines concerns over South Korean crypto exchange security

June 26, 2018
Chris Wheal

Cryptocurrency security issues in South Korea emerged again on Tuesday after it was revealed a new exchange had leaked critical information about 19 of its users, putting around $620,000 worth of tokens at risk.

Bitkoex exchange revealed data on karma cryptocurrency

An employee of Bitkoex, the South Korean exchange launched in September 2017, unwittingly posted details of the holders of the karma (KRM) digital currency on a Kakao group chat last Friday.

Leaked data

Held by 19 users of the Bitkoex platform, the karma tokens represent a total value of Won750m, or $620,000, according to a report from CoinDeskKorea.

The leaked message reportedly included the email addresses of the 19 users, also the wallet addresses and private keys to the KRM tokens in their accounts.

Bitkoex subsequently announced that it had moved any exposed assets to a safe, cold wallet – not accessible through internet hacking – and that nothing had been taken.

South Korean hotspot

Despite these assurances, the event further highlights lapses of security at South Korean exchanges, and how the spectacular rise in investment in cryptocurrencies in the country makes it a hot spot for associated criminal activity.

Last year at Bithumb – one of South Korea’s largest exchanges – an employee’s computer was hacked, revealing the information of around 30,000 users. And then, just earlier in June, hackers stole $32bn worth of cryptocurrency tokens from the Bithumb exchange.

Also in June, another South Korean exchange Coinrail was hacked and up to $40m in ethereum-based tokens were stolen.

Insurance difficulties

Indeed, Business Korea reported on Tuesday that South Korean insurers were becoming ever more hesitant in taking on the risk to provide cover for cryptocurrency exchanges.

A Korean insurance official issued a statement that said: “There are no statistics related to the risks of virtual currencies both at home and abroad and it is still not sure whether an insurer can accept exchanges as its policyholders.”

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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