S.Korean exchange Coinrail says hit by hackers, bitcoin slides

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Bitcoin (BTC) Nosedives Amid South Korea Exchange Heist

South Korean cryptocurrency exchange Coinrail said it was hacked over the weekend, sparking a steep fall in bitcoin amid renewed concerns about security at virtual currency exchanges as global policy makers struggled to regulate trading in the digital asset.

Bitcoin has dropped 11% since 5pm NY time on Friday and was trading at $6,784.04 as of 10.21am in Hong Kong on Monday, bringing its year-to-date loss to 53%.

In a blog post on Monday, Coinrail confirmed it had suspended its services following a "cyber intrusion" in its systems earlier on Sunday morning. The cryptocoin's value has reached a two-month low, losing $500 in just an hour, The Guardian reported.

The frozen tokens are Pundi X (NPXS), Aston (ATX) and Nper (NPER), according to the local crypto exchange. While the latest hacking target - a South Korean venue called Coinrail - is much smaller, the news triggered knee-jerk selling by investors, according to Stephen Innes, head of Asia Pacific trading at Oanda Corp in Singapore.

Japan in February carried out raids on a number of exchanges following the Coinbase hack, which exceeded the US$480 million in virtually currency stolen in 2014 from another Japanese exchange, MtGox.

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In a statement, a representative from the Korea Blockchain Industry Association, a self-regulatory group, revealed the exchange wasn't a member of the working group. Coinrail only said that it was cooperating with investigators and other exchanges to try and track down the perpetrators and recover the money.

In South Korea, 14 major local cryptocurrency exchanges adopted measures aimed at better protecting users in January this year, including restrictions on creating more than one account.

The remaining coins within Coinrail seem to have been secured by Coinrail through the migration of assets onto cold storage wallets.

"The remaining one-third of coins are being investigated with investigators, relevant exchanges and coin developers."

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