The South Korean cryptocurrency exchange Youbit has filed for bankruptcy after suffering a second hack of its platform this year.
Trading Suspended on the Platform
Yesterday morning, Seoul-based Youbit announced to users that a hacker had managed to steal 17% of the assets held in the exchange’s wallets. This is the second major breach the company has experienced this year. In April, the platform lost nearly 4,000 Bitcoins to attackers, and South Korean authorities at the time suggested the April incident was orchestrated by North Korea. Following that breach, Youbit said it had strengthened its security measures and placed the remaining 83% of assets into safer storage. Despite those steps, Yaipan—the company that operates Youbit—filed for bankruptcy on Tuesday and suspended all trading activities on the platform.
A Preferred Target for Hackers
Although South Korea is one of the world’s largest cryptocurrency markets, Youbit was a relatively small exchange that handled a limited volume of trades. As a result, its collapse is unlikely to have a major impact on the broader crypto ecosystem. Still, order-book exchanges remain central points of failure, and rising Bitcoin and cryptocurrency prices have made them increasingly attractive targets for cybercriminals. Users should exercise caution when storing funds with centralized services. Last month, for example, NiceHash—a cloud-based cryptocurrency mining marketplace and wallet service—was hacked, resulting in the theft of more than 4,700 Bitcoins, worth roughly $86 million at current exchange rates.