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Youbit Shuts Down Cryptocurrency Exchange After Second Hack, Files For Bankruptcy (bbc.com)

Posted by BeauHD on from the cease-and-desist dept.

phalse phace writes: After experiencing another hack, South Korean crypto-currency exchange Youbit has closed their doors and is filing for bankruptcy. BBC reports: "Youbit, which lets people buy and sell bitcoins and other virtual currencies, has filed for bankruptcy after losing 17% of its assets in the cyber-attack. It did not disclose how much the assets were worth at the time of the attack. In April, Youbit, formerly called Yapizon, lost 4,000 bitcoins now worth $73 million to cyberthieves. South Korea's Internet and Security Agency (Kisa) which investigates net crime, said it had started an enquiry into how the thieves gained access to the exchange's core systems. Kisa blamed the earlier attack on Youbit on cyber-spies working for North Korea. Separate, more recent, attacks on the Bithumb and Coinis exchanges, have also been blamed on the regime. No information has been released about who might have been behind the latest Youbit attack. In a statement, Youbit said that customers would get back about 75% of the value of the crypto-currency they have lodged with the exchange."

5 of 68 comments (clear)

  1. But wait! I thought....... by mschuyler · · Score: 4, Funny

    Bitcoin's Rise May Reflect a Monumental Transfer of Trust From Human Institutions Backed By Gov't To Systems Reliant on Well-Tested Code, Says Tim Wu (see a couple of posts down)

    --
    How about a moderation of -1 pedantic.
  2. Another reason I'm not a Bitcoin thousandaire by rmdingler · · Score: 5, Insightful

    From the onset, I wanted to like the idea of a non-governmental currency that had a cash-like anonymity, even though a lot of informed folks likened it to a Ponzi scheme.

    Beginning with the Mt. Gox debacle though, this now rather routine loss of millions by an exchange is where I lost faith in the Bitcoin as an investment option and an alternative to government issued fiat currency.

    This is why we can't have nice things

    --
    Happiness in intelligent people is the rarest thing I know.

    Ernest Hemingway

  3. Hype or Something Else? by Anonymous Coward · · Score: 5, Interesting

    I have now seen multiple stories of crypto-currencies getting stolen or exchanges hacked. Then I read about how blockchain is supposed to be the end all, be all, of transaction security. Aren't these things connected at some level? What am I missing? How can something that is supposed to so hack resistance as blockchain allow for the common theft of crypto-currencies?

    This is not a facetious question. It seems like the press (old man here, so using an old man term for everything in the public I read) is either breathlessly in awe of this stuff or telling me that someone just lost millions of dollars. I honestly don't know what to believe.

    1. Re:Hype or Something Else? by ad454 · · Score: 4, Informative

      I have now seen multiple stories of crypto-currencies getting stolen or exchanges hacked. Then I read about how blockchain is supposed to be the end all, be all, of transaction security. Aren't these things connected at some level? What am I missing? How can something that is supposed to so hack resistance as blockchain allow for the common theft of crypto-currencies?

      This is not a facetious question. It seems like the press (old man here, so using an old man term for everything in the public I read) is either breathlessly in awe of this stuff or telling me that someone just lost millions of dollars. I honestly don't know what to believe.

      Crypto-currencies are secure at a mathematical level, regarding payment which is the transfer of funds from one wallet to another.

      However payment involves compensation for the transfer of real-world assets, goods, and services, which is not covered (out-of-scope) of crypto-currencies, since regardless of how elegant the math is, there is simply no generic method to have any type of decentralized means of validating these real-world transfers. So we end up with a situation where "trusted" and "secure" 3rd party brokers are needed which act as crypto-currency intermediates between the buyer and seller, that can temporally hold the buyers purchase funds, in order to validate the transfer of real-world stuff from the seller to the buyer, before releasing the purchase funds to the seller.

      Everything falls apart at "trusted" and "secure". Any 3rd party brokers will need to hold a large pool of crypto-currencies for purchases, and will need to have some type of online presence and infrastructure, which makes it a prime target for online attackers wanting to rob it. (In the same way that thieves target banks, because that is where the money is.) However time and time again we see that these 3rd party brokers are untrustworthy or incompetent, typically without even providing the minimum of security measures.

      At the end of the day, this is where some government body (maybe from a different neutral country like Switzerland) will need to step up and implement some type of accreditation/certification of 3rd party brokers, that conform to the necessary regulation/protection and provide insurance protection, before crypto-currencies can really be trusted for transactions.

       

    2. Re:Hype or Something Else? by ceoyoyo · · Score: 5, Funny

      Sounds like a good idea. Perhaps each country could certify their own brokers, but they'd all be connected through international agreements and treaties. Implement a system for transferring funds, owned and run privately but regulated by those same international agreements. You could call them, I don't know, banks or something.