Bithumb is one of the world’s top five cryptocurrency exchanges and each one, from Coinbase to Bithumb, has been targeted by cyberthieves. As the worth of Bitcoin and other digital currencies continue to rise, hackers have increased their attacks on all of the exchanges. But the South Korea-based Bithumb exchange is one of the first major exchanges to have experienced a successful attack. Smaller attacks, such as one on the Yapizon exchange, which is also based in South Korea, saw the loss of over $4 million worth of bitcoin. These attacks should be seen as warning flags. From the upper levels of the exchange down to the end user, cybersecurity protocols must be put into place.
BitCoins not that safe
Cyrptocurrency itself is thought to be impenetrable. As a result many organizations, from banks to insurance companies and even some governments, have been backing up their data and their sensitive information with blockchain, the open ledger technology that underlies all bitcoin transactions. Though the blockchain technology that gives rise to bitcoin has not been compromised, hackers were able to gain access to Bithumb users’ personal information. Using that information, obtained through a Bithumb employee’s personal computer, hackers were able to remotely access user’s digital wallets and abscond with hundreds of millions of dollars worth of bitcoin currency.
Bithumb released information about the hack, explaining that the network was not compromised, nor were the exchange’s servers. The fault was in lax security measures on the part of an employee whose personal computer housed a database containing users’ personal information. Over 31,000 customers were hacked, which is roughly 3% of the exchange’s total number of users.
Bitthumb tries to make things right
Bithumb is reimbursing affected users and offering monetary compensation to those whose personal information was compromised. It is important to note that ultimately it was the end user who was the weakest link in the cybersecurity chain. Victims of phishing attempts shouldn’t be blamed for momentarily failing to properly verify suspicious emails, but it is a wake up call to all users to exercise caution on all devices at all times. Default passwords should be changed. Passwords should differ between accounts and devices.
In the past, bitcoin users were a small group of highly tech-oriented geeks. Now that bitcoin is on the verge of becoming mainstream, new users must take the same precautions as more experienced users. If they do not, then this hack could be the first of many.