Cryptocurrencies Fall as Korean Exchange Says $32 Million Stolen

Bloomberg) -- Cryptocurrencies dropped after the second South Korean exchange in as many weeks said it was hacked, renewing concerns about the safety of digital-asset trading venues.

Bithumb, ranked by Coinmarketcap.com as the world’s seventh-largest crypto exchange by traded value, said on Wednesday that hackers stole about 35 billion won ($32 million) and that Ripple was among the coins taken. The exchange halted cryptocurrency deposits and withdrawals, said it will compensate victims and moved investor assets to a so-called cold wallet, which is disconnected from the Internet and less vulnerable to theft.

Bitcoin, the largest cryptocurrency, dropped as much as 2 percent and was trading at $6,624 as of 7:24 a.m. in New York, bringing this year’s decline to 54 percent, according to Bloomberg composite pricing. Ripple, Ethereum and Litecoin also retreated, along with some Asia-listed stocks with exposure to digital currencies.

Enthusiasm for virtual currencies has waned this year partly due to a string of cyber heists, including the nearly $500 million theft from Japanese exchange Coincheck Inc. in late January. Last week, a South Korean venue called Coinrail said that some of the exchange’s digital coins appeared to have been stolen by hackers, though it didn’t disclose how much.

While the latest theft has weighed on sentiment, investor reactions have been relatively subdued, said Ryan Rabaglia, head trader at cryptocurrency dealing firm Octagon Strategy Ltd. in Hong Kong. “The market has sort of become a bit more battle-hardened. It can weather the storm on these negative reports.”