Crypto Exchange Bithumb Hacked, Loses $31.5M

South Korea-based cryptocurrency exchange Bithumb has confirmed that virtual currency worth about $31.5 million has been stolen by hackers.

Bithumb, the sixth-busiest cryptocurrency exchange in the world according to Coinmarketcap.com, posted a notice on its website warning that it had stopped all trading after becoming aware that “some cryptocurrencies worth about 35 billion won were seized between late yesterday and early morning today.”

On Twitter, the Seoul-based operator, which trades more than 37 different virtual coins, said that it would fully compensate customers from its own reserves. The firm also added that all user assets are now being stored in “safe cold wallets” that are not directly connected to the internet.

“Due to the increasing safety issues, we are changing our wallet system,” Bithumb said on Twitter. “All deposit and withdrawal service will be stopped to make sure the security. We will keep notice you of the restart of the service. We apologize for your inconvenience and thanks for your understanding.”

Bithumb urgently ask our valuable customers not to deposit any fund into Bithumb wallet addresses for the time being.

▶ https://t.co/rnMGmKMBUf

— Bithumb (@BithumbOfficial) June 20, 2018

Another Blow for Cryptocurrencies

After Bithumb’s tweets were published, the price of bitcoin fell from about $6,718.35 to as low as $6,561.79, according to CNBC and CoinDesk's price index. By 4:45 AM EST, the price of bitcoin recovered slightly to reach $6,632.30

Ethereum also tumbled following news of the heist, according to CoinDesk data, before paring some of its losses. (See also: What Happens If the Price of Bitcoin Crashes?)

The Bithumb theft came just weeks after hackers stole about $37 million from South Korean crypto exchange Coinrail and several months after more than half a billion dollars-worth of digital currency was taken from Japan’s exchange Coincheck.

Some media commentators blamed the recent sell-off in cryptocurrencies on the Coinrail heist, even though the South Korean firm was only ranked the 99th largest crypto exchange in the world in terms of trade volume. Sentiment in cryptocurrencies has also come under pressure from reports that U.S. regulators are investigating potential price manipulation at four major cryptocurrency exchanges. (See also: What Caused The Crash In Bitcoin's Price Last Weekend?)