Another attack on a Bitcoin exchange, this time in South Korea, has reinforced the need for tighter security as hackers worldwide seek to steal the cryptocurrency as its value increases. Bitcoin owners are difficult to trace, so this type of attack means criminals can "cash out," using proceeds for illegitimate transactions that favor rogue organizations.
Observers have speculated that the attack, reportedly perpetrated by North Korea, was in retaliation towards its southern neighbor in response to South Korean support for United Nations sanctions. Hackers used an email with a malware payload to distribute the attack, causing as yet unknown damage to the exchange.
But this is just one of a series of Bitcoin attacks; it suffered major DDoS attacks in mid-2017 as the currency equivalent value hit $3,000 for the first time. Bitfinex, the world's largest dollar-based exchange has also fallen foul of hackers, including a $65m loss in 2016, with the latest in a string of attacks earlier this month. Bitcoin is now a major hacker target because of the current bull market in cryptoassets. About a third of Bitcoin trading platforms have been hacked, and nearly half of them have closed since 2011 according to a study funded by the US Department of Homeland Security.
By comparison, another study by Privacy Rights Clearinghouse, cited today by Reuters, revealed that of reported hacks, only 1% of brick-and-mortar US banks had been attacked.
The US Department of Homeland security, which has been increasing its preparedness for cyber attacks, did not immediately reply to a request for comment.
According to analysts, because Bitcoin transactions provide an open record, it is gradually falling out of favor with traders on the Dark Web as US law enforcement gets better at tracing transaction owners. This is leading to the proliferation of private cryptocurrencies, such as open source Monero, alongside older currencies including Litecoin, ZCash, Dash and Ripple. Today, one Bitcoin is worth $4,604.
Bitcoin did not respond to a request for comment.
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— Simon Marshall, Technology Journalist, special to Security Now