Thursday, June 20, 2019

External Auditor’s Report on Bithumb’s 13 Million Dollars Hack Released

Following the recent hack on Bithumb exchange system, an audit was piloted by an external auditor on the South Korean based crypto exchange funds. Bithumb made this announcement on the 11th of April.

The hack saw South Korea’s top exchange lose 14 billion won, equivalent to $13 million, two weeks ago. Analysis done by senior officials in the crypto exchange has suggested that a part of the team involved in the hack was an insider.

The Bithumb Hack

Since the latest hack, the digital assets exchange has reiterated that the funds of its users remain secure in their cold storage wallets. The audit was also conducted to show that the exchange is not in trouble of any sorts.

The tokens hacked in particular were EOS tokens, which amounted to 14 billion. The company has, however, announced to the public that the stolen amount consisted of funds owned by them. After the security breach, all the funds that were left by the hackers were shifted to cold storage.

According to the statement linked to an accounting firm’s statistics:

“We have stated that we will conduct fair and objective due diligence on all assets that we have through a reliable external Audit. We are pleased to inform you that our members’ valuable assets are managed and maintained through the attached due diligence report.”

This is not the first hack that the South Korean exchange has experienced. Last year August, Bithumb lost several tokens which amounted to $30 million. Bithumb also stated that in the year 2018, they made losses amounting to $180 million due to the 85% correction of Bitcoin’s price following its all-time high. The subsequent hacks have not done much in reducing the firm’s losses.

The company stated that it had a difficult 2018 as Bitcoin’s bear market persisted for a lengthened period with several losses coming to investors. The $3,100 price level did not also make things easy for investors and firms in the crypto world. Statistics released by the company, however, show that Bithumb experienced increased sales by 17.5 percent.

Other Top Crypto Exchange Hacks

The hack experienced by Bithumb is not new to the crypto world as several secure exchanges have been hacked since the inception of Bitcoin.  In the year 2011, the first Bitcoin hack happened; Mt. Gox lost several funds during the hack. In 2014, Mt. Gox got hacked again, leading to a total of 1.35 million bitcoins being stolen from the exchange.

Top exchange Poloniex also got hacked and lost 97 bitcoins, Cryptopia got hacked earlier this year, BitFloor had 24,000 bitcoins stolen from its exchange and BitStamp in 2015, had 19,000 bitcoin stolen from its exchange. The fear with most investors is that these hacks usually lead to non-reimbursement of funds. In fact, eight years after the Mt. Gox hack, users are still battling to recover their funds.

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