Bithumb is Covering All Losses Without Any Compensation
Bithumb, one of the largest virtual coin exchange in South Korea, confirmed on Wednesday that roughly 35 billion Korean won (US$31 million) worth of cryptocurrency were stolen through a hack attack. Within a month, it was the second hacking attack against South Korea-based cryptocurrency exchange which blow the crypto community. Bithumb has made a commitment of covering all losses, but according to Yonhap News, it is less likely for the crypto exchange to get much insurance compensation for the incident.After the hacking attack took place, Bithumb has transferred all the digital assets to a cold wallet and suspended the coin deposit and withdrawal services. In the meantime, Seoul police has launched a probe into the case. Several officers were sent to Bithumb’s Seoul headquarters to collect records and data.
According to Yonhap News, the total amount of damages by hacking attacks on cryptocurrency exchanges in South Korea stood at some 97.7 billion won over the past 14 months. However, few customers have received due compensation.
Bithumb confirms “the loss will be compensated by its own reservoir”. This decision has been welcomed by the crypto community. However, due to the particularity of digital assets, the losses of cryptocurency will not be covered by a insurance company and it is still controversial of whether digital currency can be determined as assets or not.
A series of crypto hacking attacks have sparked public calls for the government’s clear regulation of cryptocurrency. Kim Seung-joo, a professor at Seoul’s Korea University indicated that:
“Local exchanges have quite poor security systems in place. It is imperative for the government to have a clear definition related to the matter and create legal boundaries.”
Fortunately, Bithumb said Thursday that it may be able to reduce the 35-billion-won damage. The firm stated taht:
“Bithumb is reducing the amount of damage through ongoing damage recovery, future figures are expected to be lower.”