Following the announcement by South Korean crypto exchange Coinrail that it has been hacked, a local publication reported that some banks had identified suspicious transactions at the exchange and stopped providing services to company months before the incident.
Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space
Suspicious Transactions Detected
South Korea’s seventh-largest cryptocurrency exchange, Coinrail, announced that it was hacked on Sunday, June 10, with the thieves targeting several altcoins. The damage is estimated to be around 45 billion won (~US$42 million), according to local media.
The hardest hit was Pundi X’s NPXS, a recently-launched token that accounts for roughly two-thirds of Coinrail’s trading volume. Other coins allegedly stolen include ATX, NPER, and DENT, the exchange wrote on its website.
On Monday, Chosun reported that, back in February, some local banks detected money-laundering activities at Coinrail. The publication quoted a bank official revealing:
Several banks that traded with Coinrail found suspicious money-laundering transactions in Coinrail in February, and some banks took steps to stop their fund deposits in April.
The banks, however, did not offer any specific reasons for the service suspension, the news outlet noted.
In South Korea, banks can legally refuse to service crypto exchanges under the Financial Transaction Reporting and Use Act and Virtual Currency Anti-Money Laundering Guideline if they do not use real-name accounts. The real-name system was implemented by the regulators at the end of January. However, the conversion rate has been low.
Security Breach and Police Investigation
The notice on Coinrail’s website.
The Coinrail incident has attracted a lot of media attention because its alleged hack would be the largest cyber theft in South Korea to date by the equivalent won amount. Two other major
