Hacked Crypto Exchange Bithumb to Compensate Investors, Working to Recover Lost Funds

  • Hacked cryptocurrency exchange Bithumb has revealed it will cover the hack's losses with its own funds.
  • The company revealed it has over $450 million in its coffers, and it is working with other exchanges to potentially recover some of the lost funds.

The world’s sixth largest cryptocurrency exchange by trading volume, Bithumb, was recently hacked for roughly $31.5 million. Shortly after, it moved its funds to cold storage for extra security, and it has now revealed it is set to compensate investors, while it’s working with other exchanges to recover funds.

According to a new update posted on the exchange’s website, while the firm did report a $31.5 million to the Korea Internet & Security Agency (KISA), it may be able to recover some of the lost funds.

The update reads:

We have announced about 35 billion Korean won worth of damages to KISA. BitHumb is reducing the amount of damages through ongoing disaster recovery, future figures will be lower.

Bithumb

The company revealed it is currently working with other cryptocurrency exchanges to both prevent future incidents, and to retrieve some of the lost funds. Notably, while the crypto exchange officially admitted it was hacked, it didn’t reveal how the breach occurred, nor what cryptocurrencies were stolen.

Bithumb further added that company and customer funds are kept separately, and that “the company believes you can use Bithumb safely.” It noted it will fully compensate investors for their losses using company funds. Per the announcement, it has about 500 billion KRW (about $450 million) in its coffers.

Investors will likely only be compensated once the company’s investigation comes to an end, and for the time being withdrawals and deposits are halted at the exchange. The hack, according to reports, was deemed “embarrassing” by the Korean Blockchain Association, a self-regulatory body.

On social media various observers, including industry veteran Charlie Shrem, noted that Bithumb covering the hack’s losses means our industry is growing, presumably because taking on the losses protects users.

Per the update, Bithumb is conducting the investigation along with the Korea Communications Commission, the National Police Agency, and KISA. As reported Bithumb was earlier this year hit with an investigation that saw various government agencies probe its operations, with the National Tax Service (NTS) concluding it was found not guilty of tax evasion.

Last year, it was revealed the cryptocurrency exchange saw its profits rise by a factor of 171. Given the lack of information available on its recent security breach, it’s unclear whether these reports motivated the hackers.

Overstock Committed to Crypto Even After CEO Patrick Byrne’s Exit

Michael LaVere
  • Overstock said it is "absolutely" committed to crypto in the wake of CEO Patrick Byrne's resignation.
  • Company continues to support its high profile tZERO blockchain project. 

Popularo nline retailer Overstock remains committed to cryptocurrency even after the sudden resignation of its long-time CEO and crypto supporter Patrick Byrne. 

Crypto Supporter Patrick Byrne Resigns

On Aug. 22, Byrne announced he would be resigning his position as CEO following a series of comments made the week before about his involvement in FBI investigations and a romantic relationship with a Russian spy. Shares for Overstock plummeted more than 35% following Byrne’s bizarre comments, but rallied in the aftermath of his resignation. 

Despite making a sudden exit, Byrne had established Overstock as one of the most high-profile companies to support bitcoin and cryptocurrency, a legacy that plans to continue even in his absence. 

Newly appointed interim CEO Jonathan Johnson was asked by Yahoo Finance if the company will retain its focus on crypto and blockchain. 

He said, 

Absolutely, yes. The fledgling blockchain business is doing well.

He continued, 

Our team at Medici Ventures, which is the blockchain-focused business, is still working hard, and those different companies in the Medici family are growing at a nice rate.

Earlier in the month, Overstock reported suffering a 23% decrease in revenue for Q2 2019, despite claiming that the blockchain division was performing well. Overstock operates the notable tZERO platform, which was recently opened to retail investors for trading. In addition, the company announced in July that they would be issuing a digital-equivalent of a dividend for shareholders.