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Bitcoin Exchange Youbit to Declare Bankruptcy After Hack and Theft



A South Korean bitcoin exchange Youbit is getting ready to declare bankruptcy after a crippling hack and subsequent theft.

A message on Youbit’s official website reported that the incident happened at around 4:34 a.m. local time.

It is believed that an external hack led to the loss of “about 17 percent of total assets.”

The cyber attack is the second for Youbit. It was previously known Yapizon.

The exchange was first targeted in April in an attack.

South Korean officials believe that attack was done with the support of neighboring North Korea.

Recent reports show that intelligence services in South Korea claim that North Korea is behind additional attacks against domestic cryptocurrency exchange.

This includes market-leader Bithumb.

Because of today’s attack, Youbit said that it has stopped deposits and withdrawals.

According to a report, investigators are now doing due diligence on the incident.

Youbit is a smaller player in South Korea’s cryptocurrency market.

The world’s busiest cryptocurrency exchange Bithumb accounts for about 70 percent of the country’s market share.

Bitcoin exchanges and wallets have a track record of being targeted.

Bitcoin Exchanges More Vulnerable

Security experts say they become more vulnerable to cyber-crime as valuations rise.

And while the company says that users may not see the complete return of their funds, the statement said that Youbit would be expending the cryptocurrency it still has in its possession.

“Due to bankruptcy, the settlement of cash and coins will be carried out in accordance with all bankruptcy procedures,” the exchange said.

“However, in order to minimize the damage to our members, we will arrange for the withdrawal of approximately 75 percent of the balance at 4:00 a.m. on Dec 19, The rest of the unpaid portion will be paid after the final settlement is completed.”

The moves are being undertaken despite what Youbit described as a less severe intrusion compared to the one in April.

The company also proposed that it would seek to pare losses by appointing insurance funds.

They would also sell a stake in the exchange.

“We will do our best to minimize the loss of our members by 17 percent , through various methods such as cyber comprehensive insurance (3 billion [won]) and selling the operating rights of the company,” the company wrote.

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