Bithumb exchange revealed that 11 cryptocurrencies were the main target of the hack that took place last week. The exchange also stated that the amount recovered is approximately half of the total stolen i.e. $16 million USD. According to the post, the platform in collaboration with worldwide cryptographic exchange and Cryptographic Fund was able to recover some of its lost funds.
The Scope of the Heist
19 coins were targeted altogether. Among them were, BTC, BCH, ELF, ETH, ETHOS, GNT, HSR, KNC, OMG, VEN and XRP. Among all these cryptocurrencies, BTC was the leading target of the heist with 13.9 billion won lost. This makes sense since Bitcoin is the most dominant coin and the easiest to cash out on because it is the most widely accepted of them. The scale of the damage speaks to cryptocurrency dominance:
Compensation Airdrop Event
Bithumb is now moving to compensate the victims of this heist out of its own funds. This announcement doesn’t say anything about resuming deposits or withdrawals. Bithumb is still taking steps to prevent further password leakage and improve security within the platform. As such, the lost funds of users will be compensated in the form of a cryptocurrency airdrop. The exchange has not yet confirmed which cryptocurrency will be used in the airdrop. Users must apply through the below link to be eligible for the distribution.
Bithumb Compensation Details
To be fair with its customers, Bithumb offers interest between “the time of application to the date they are fully compensated”. More specifically, it notes; “The annual interest rate of 10% will be prorated over the period, hence the longer you hold, the higher compensation becomes”
From the receipt day of the reward, after every – 20- 21:00 (UTC +9), we will calculate the amount of the password money held by each member and pay the equivalent of 10%. Then the equivalent value of cryptocurrencies will be given away in a form of airdrop.” This suggests that Bithumb can compensate the users who fell victim to the hack, but it would suffer a heavy blow to its capital reseves as a result. Therefore it prefers to defer payments and pay interest to the users who are willing to redeem their compensation at a later stage.
Bithumb’s Heist Within the Context of South Korean Regulatory Efforts
This heist and the subsequent compensation plan comes at the backdrop of South Korean efforts to regulate the cryptocurrency and ICO industries. South Korea is getting stricter with regards to its stance on ICOs and cryptocurrencies. Bithumb is still ranking among the top ten largest cryptocurrency exchanges by 24-hour trading volume despite the hack. This highlights the need that governments argue there to regulate this kind of activity, as well as the lack of user understanding about the perils of trading and keeping funds on an exchange.