December 13, 2017 12:11
Korea's largest online cryptocurrency exchange Bithumb has been slapped with a W43.5 million penalty and W15 million fine after account theft and leaks of personal information (US$1=W1,092).
This is the first punitive measure the government has imposed to rein in the out-of-control bitcoin market, and industry insiders fear more penalties may be in store.
Korea is home to one of the world's largest bitcoin exchanges and the third biggest market in the world.
The Korea Communications Commission on Tuesday decided to impose the fines on BTC Korea.com, which operates Bithumb. An investigation by the KCC found that a hacking attack in April resulted in the theft of 31,506 IDs and passwords of Bithumb users.
Bithumb suffered no fewer than 2 million hacking attacks until July involving 3,434 Internet addresses, and money was stolen from 266 virtual accounts.
"Bithumb failed to protect the information of users by not encrypting private data," the KCC said, adding that prosecutors are still investigating the actual extent of damage.
KCC Chairman Lee Hyo-seong said, "We are seeing continued problems with cryptocurrency speculation and hacking attacks against online exchanges. We will bolster regulations until separate laws for cryptocurrency exchanges are drafted."
Bithumb accounts for around 70 percent of cryptocurrency trading in Korea and recorded W150 trillion worth of trading volume until November. It earns hundreds of billions of won in transaction fees.
Bithumb also owns a significant amount of cryptocurrency itself. As of last month, it had 1.47 million registered users.
Korea has an estimated 2.1 million cryptocurrency investors who have parked W80 trillion in the market.
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