Bithumb, a crypto exchange that has been a victim of a series of major hacks in the past. Did it manage to recover the stolen assets or did it lose the trust of its users too? Read more!
Although the world of crypto consists of a variety of exchanges, the South Korean exchange, Bithumb, has an incredible fan-following that proves its popularity in the community. It has a good global standing and is trusted by millions of people.
With Bithumb, you can easily access the world of digital trading since their innovative technological strategies and methods bring a considerable amount of ease to the user experience. This effectively increases the comfort level of the customers and makes the process seamless for both beginner and expert traders.
It’s a no-brainer that Bithumb is one of the top names in the digital financing revolution offering its users a wide variety of reliable trading options and a stable security system to protect their transactions and investments. However, their security systems have been tested to their fullest in the past.
The Bithumb Hack
According to various reports, an unknown group of individuals hacked Bithumb’s volatile servers and managed to transfer a huge chunk of assets valued in different currencies to their wallets. Let’s discuss how the attack took place and how the platform rectified its security vulnerabilities.
When Did It Happen?
The Timeline of Bithumb Hacks
It was reported that an unknown criminal group had stolen $7M in February 2017. The whereabouts of the hacker group remain unknown to date.
The user information from a Bithumb employee's personal computer was stolen by the hackers and nearly $32 million of cryptocurrency was stolen.
The hack that took place in June 2019 shot down Bithumb to 10th place based on the trading volume, which was previously the 6th biggest crypto exchange in the world. This was considered as the largest attack on South Korea's Bithumb exchange where around $30 million digital tokens were stolen by the hackers.
Who Was Involved and How Did It Conclude?
It is still not known who was involved in the past Bithumb hacks. The uncertainty of security standards at Bithumb had been a major issue for most investors after repeated hacking attempts at the exchange. The third attempt served as the last nail in the coffin as it triggered a formal investigation from the South Korean Ministry of Science and Technology (MIC) to identify the reason behind the theft of $30 million worth of cryptocurrencies.
The Ministry ordered the exchange to suspend its operations to avoid the loss from escalating and to incorporate standardized damage control practices.
As per the initial reports of MIC, inadequate network isolation, lack of monitoring systems to differentiate between ambiguous and usual trading activities, and insufficient mechanisms of the cryptographic key and password management led to the fall of South Korea’s sixth-largest cryptocurrency exchange.
Impact of the Bithumb Hack on the Crypto Community
Following the biggest breach of the year 2017, the crypto community has been consistently putting efforts to resolve losses and fix the downfalls. Since then, they have taken numerous security measures to ensure security. The aftermath of the recurrent hacks involved the communities realizing their loopholes and bringing new upgrades to their security systems.
Other Hacks in the Crypto Community
Bithumb hack is one of the most recent heists in the world of cryptocurrency. The others are:
- The Africrypt hack,
- Bitfinex Hack,
- The Poly Network hack
- The Coincheck hack,
- Coinrail Hack,
- The Bitgrail hack,
How Can We Protect Exchanges From Hackers?
- Bithumb has recently introduced an ISMS service to keep the digital assets of their consumers protected and to safeguard their confidential information.
- For protection against digital theft, users must have a registered account to initiate trading that will maintain dedicated access for the respective user.
- Improvised regulations need to be conducted by the government to ensure the funds can be secured.
- The OTP verification process should be made mandatory on all exchanges.
- The trade monitoring system should keep an eye on the crypto exchange 24 x 7 to avoid security red flags, market manipulations, and illegal trading practices.
- To prevent data leaks, customers are advised to keep their account details private.
- Upgraded forensic tools to spot bug-spotting hack recognition.
Technology has changed the way people manage things. With digital evolution, many platforms have offered us ways to manage money online. Although cryptocurrency is the hottest gossip of the town right now due to its widespread popularity on the majority of social platforms, we must be aware of the potential downfalls and risks that their trading contains.
From the investors’ point of view, investments require well-thought and well-done research beforehand to avoid or handle the various crypto scams. The exchanges need to make sure that they develop a safe environment for their customers who are involved in regular trading activities and investment options.
According to various researchers, investment losses in most cases are based on the users’ lack of knowledge and failed investment strategies. So, if you are planning to try your luck at cryptocurrency, you need to be prepared and keep yourself informed of the challenges that await an average crypto trader.