Cryptocurrencies Lose $42 Billion After South Korean Bourse Hack

The 2018 selloff in cryptocurrencies deepened, wiping out about $42 billion of market value over the weekend and extending this year’s slump in Bitcoin to more than 50 percent, according to Bloomberg.

Some observers pinned the latest retreat on an exchange hack in South Korea, while others pointed to lingering concern over a clampdown on trading platforms in China. Cryptocurrency venues have come under growing scrutiny around the world in recent months amid a range of issues including thefts, market manipulation and money laundering.

Enthusiasm for virtual currencies has waned partly due to a string of cyber heists, including the nearly $500 million theft from Japanese exchange Coincheck in late January. While the latest hacking target, a South Korean venue called Coinrail, is much smaller, the news triggered knee-jerk selling.

Coinrail said in a statement on its website that some of the exchange’s digital currency appears to have been stolen by hackers, but it didn’t disclose how much. The venue added that 70 percent of the cryptocurrencies it holds are being kept safely in a cold wallet, which isn’t connected to the Internet and is less vulnerable to theft.

Two-thirds of the stolen assets, which the exchange identified as NPXS, NPER and ATX coins, have been frozen or collected, while the remaining one third is being examined by investigators, other exchanges and cryptocurrency development companies. Coinrail trades more than 50 cryptocurrencies and was among the world’s Top 100 most active venues. The Korean National Police Agency is investigating the case.