This morning, the second South Korean cryptocurrency exchange in two weeks announced it has been hacked. There is a trending problem with online wallet security, a lack of urgency in protecting funds, and waning confidence in the cryptocurrency markets.
For the second time in two weeks, South Korea was hit with a multimillion-dollar cryptocurrency hack. The South Korean exchange Bithumb confirmed[1] on June 20[2] that 35 billion Korean won (approximately $31.5 million) in coins was stolen. A temporary notice (that has since been removed from the Bithumb website) announced a halt in trading after the exchange revealed that "some cryptocurrencies worth about 35 billion won were seized between late yesterday and early morning today".
The announcement comes just nine days after fellow South Korean exchange Coinrail[3] acknowledged it was robbed of close to 40 billion won (around $35 million at the time) worth of digital assets, and five months after the hack of Japanese exchange Coincheck, which – at roughly $530 million in coins lost – is possibly the largest[4] exchange theft to date.
In each of these hacks, the security shortcomings involve the exchanges' "hot wallets" or wallets that are stored and are accessible online. Bitcoin transaction fees have dramatically risen in response to the Bithumb hack: The average transaction costs nearly $3 up from $0.55 and takes 20 minutes to confirm instead of the previous six minutes (at time of writing). This is likely due, in part, to Bithumb's consolidation of its hot wallet inventory to prevent further loss.
Hot wallets are convenient because they serve as staging points for exchange trades. Exchanges typically either deposit or withdraw
