South Korean cryptocurrency exchange hacked for nearly $40M

Coinrail lost almost 30 percent of its cryptocurrency

South Korean cryptocurrency exchange hacked for nearly $40M

South Korean cryptocurrency exchange Coinrail fell victim to a hack on Sunday losing 30 percent of its crypto funds worth nearly $40 million.

According to CoinMarketCap, Coinrail is among the top 100 crypto exchanges in the world handling $2.48 million in transactions over a period of 24 hours, prior to the hack.

The exchange halted all its operations right after the “cyber intrusion” and left a message on its website confirming the loss. Coinrail says that the remaining 70 percent of its cryptocurrency reserves are transferred to cold wallets for security reasons.

“At present, 70% of your coin rail total coin / token reserves have been confirmed to be safely stored and moved to a cold wallet and are in storage,” the message read.

For the 30 percent of the assets that have been stolen, Coinrail says its team might be able to recover 20 percent of them by reaching out to other crypto exchanges where the stolen funds have been moved. For that, Coinrail will have to either freeze the funds or recall them. The remaining 10 percent is difficult to get back but the company is holding an investigation for them.

“Two-thirds of stolen cryptocurrencies were withdrawn or frozen in partnership with related exchanges and coin companies. For the rest, we are looking into it with an investigative agency, related exchanges and coin developers,” said Conrail

The most traded coin on Coinrail was Pundi X (NXPS) and it was also the cryptocurrency that took the biggest hit with more than 2 billion of NXPS tokens (worth $19.5 million) stolen.

Pundi X stated that the stolen amount from Coinrail was moved to decentralized cryptocurrency exchange IDEX which has agreed to freeze NXPS trading on its platform.

The company also released an Etherscan URL of the wallets that received and moved the stolen tokens to IDEX. A wallet named “Fake_Phishing1432” received coins from another wallet named “Fake_Phishing1431” and then transferred the coins to IDEX.

The Etherscan also revealed that the hackers were able to steal some other tokens like Aston X (ATX) tokens, Dent (DENT), Tron (TRX), NPER (NPER), Jibrel Network (JNT), Storm (STORM), Kyber Network (KNC) and B2BX (B2B).

Tokens other than Pundi X were moved to another wallet at another cryptocurrency exchange called Etherdelta.

According to a report from local media outlet Korea Herald, police and the Korea Internet & Security Agency (KISA) have already started investigating the matter.

“We secured the access history of Coinrail servers and we are in the process of analyzing them,” said a police spokesperson.

“We began the investigation immediately after receiving reports from the company. It may take around a month to accurately figure out the causes,” said a spokesperson of KISA

The news of Coinrail suffering from a cyber attack had a severe effect on crypto markets where Bitcoin and some other altcoins plunged in value. Bitcoin was down 10 percent on Sunday, losing $500 in an hour and dropping to $6,627 while other altcoins also suffered major losses.

Coinrail is not the only crypto exchange to be targeted by cyber attackers this year. Popular crypto exchange Bitfinix, which suffered a major $68 million hack in 2016, faced a domain denial of service (DDoS) attack last week.

Japanese exchange Coinheck suffered from the biggest cryptocurrency theft in January, losing roughly $420 million.

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