Authored by Stan Higgins via Coindesk – Content remix by Halifax America

 

A South Korean bitcoin exchange is moving to declare bankruptcy following what it said was a debilitating hack and theft.

 

A message on Youbit’s official website posted today states that, at around 4:34 a.m. local time, an external hack resulted in the loss of “about 17% of total assets.”

The cyberattack is the second for Youbit, previously known Yapizon. The exchange was previously targeted in April in an attack which South Korean officials believe was conducted with the support of neighboring North KoreaRecent reports indicate that intelligence services in South Korea suspect that North Korea is behind additional attacks against domestic cryptocurrency exchanges, including market-leader Bithumb.

As a result of today’s attack, Youbit said that it has halted deposits and withdrawals. According to Reuters, investigators have begun looking into the situation.

And while the company suggested that users may not see the full return of their funds, the statement indicated that Youbit would be disbursing the cryptocurrency it still has in its possession.

  • “Due to bankruptcy, the settlement of cash and coins will be carried out in accordance with all bankruptcy procedures,” the exchange said in a translated statement.
  • “However, in order to minimize the damage to our members, we will arrange for the withdrawal of approximately 75% of the balance at 4:00 am on December 19, the rest of the unpaid portion will be paid after the final settlement is completed.”

The moves are being taken despite what Youbit characterized as a less severe intrusion compared to the one in April. The company also suggested that it would seek to pare losses by tapping insurance funds and selling a stake in the exchange.

“We will do our best to minimize the loss of our members by 17%  through various methods such as cyber comprehensive insurance (3 billion [won]) and selling the operating rights of the company,” the company wrote.

 


The risk of loss in the trading of stocks, options, futures, forex, foreign equities, and bonds can be substantial and is not suitable for all investors. Trading on margin or the use of leverage is not suitable for all investors and losses exceeding your initial deposit is possible. Supporting documentation is available upon request. Trading futures, options on futures, and forex involves substantial risk of loss and is not suitable for all investors. Carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources and only risk capital should be used. Opinions, market data, and recommendations are subject to change at any time. The lower the margin used the higher the leverage and therefore increases your risk. Past performance is not necessarily indicative of future results.