North Korea suspected of Youbit Hack

Bitcoin's unexpected value increase has transformed the cryptocurrency into a perfect target for North Korean hackers

Ramy Caspi
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Bitcoin prices have been at an all-time high but the cryptocurrency could be facing growing risks of hacking due to its unexpected value increase.

North Korea has been implicated for possible involvement in a massive cyber-attack on a South Korean currency exchange Youbit this week.

The price of bitcoin fell from close to $19,000 to around $16,300 on Tuesday after news of the security breach broke.

The Youbit exchange shut down and collapsed into bankruptcy on Tuesday after hackers stole 17% of its assets. 

Youbit was previously targeted in April when nearly 4,000 bitcoins were stolen in a cyber attack by a spy agency linked to the North Korean government, Reuters said, citing local South Korean reports.

Police investigators and the Korea Internet and Security Agency are viewing the case as an extension of the April attack, Bloomberg reported, citing a person familiar with the investigation.

“There were no additional losses, as other coins were in the cold wallet,” Yapian said. While it suspended coin and cash deposit and withdrawals as of 2 pm local time, it said about 75% of assets could be safely withdrawn by clients.

According to the Wall Street Journal, the investigators have good reason to believe Kim Jong-un’s regime is the culprit. From the report:

The people said there were telltale signs and historical evidence that North Korea was behind the Youbit attack. North Korean hackers in April targeted the same cryptocurrency exchange, operating under a different name, several of the people said. Yapian, the company that operates Youbit, suspended trading and filed for bankruptcy after Tuesday’s hack.

The bitcoin heist follows similar suspected Pyongyang-directed offensives against other South Korean cryptocurrency exchanges—and an increasing number of attempts to steal from individual investors.

North Korean cyber attacks are on the rise.

North Korea has built up an army of hackers, thought to be 1,700-strong.

On Tuesday, the White House accused North Korea of masterminding this year's WannaCry cyber attacks, which affected computer systems in schools, hospitals, and businesses across 150 countries. The malware demanded ransom payments in the form of bitcoin.

In July, South Korea’s largest cryptocurrency exchange platform, Bithumb, was hacked, which resulted in monetary losses worth some 7.6 billion won ($7 million).

The Youbit hack is the latest security breach to hit bitcoin and other cryptocurrency exchanges