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.


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.

Bitcoin Ransomware Attack: Google Disables Baltimore Officials’ Gmail Accounts

The Baltimore City government has been under siege since May 7, as it was hit with a ransomware attack that saw hackers demand $100,000 in bitcoin and officials refuse to pay the ransom. In a new development, Google disabled officials’ Gmail accounts being used as a turnaround.

According to The Baltimore Sun, the Baltimore City government created Gmail accounts to work during the ransomware attack, as the city’s servers have been disrupted to the point their baltimorecity.gov emails aren’t working.

Recently, however, emails sent to several of the newly created Gmail addresses returned messages claiming the “email account that you tried to reach is disabled.” It was found that Google has considered these business accounts that need to be paid, instead of free individual Gmail accounts.

James Bentley, a spokesperson for Mayor Bernard C. “Jack” Young, noted Baltimore planned to purchase a business plan from Google so the accounts could be restored. The news outlet quoted him as saying:

They disabled them because they deemed them to be business accounts. Their position is these accounts are circumventing their paid service

City Council President Brandon Scott added that meanwhile his staff was appealing the suspension with Google, although he hadn’t been briefed on the problem. A spokeswoman for Baltimore’s health department claimed she was able to see received old emails, but not send or receive new ones.

Per her words, there as no notice on why the account was disabled. On its website, Google claims it’ll suspend accounts used for sending spam, distribute malware, abuse children, violate copyright, or for other illicit purposes.

As CryptoGlobe covered, Baltimore was hit with a ransomware attack earlier this month that brought its real estate industry to a halt and crippled some of its essential systems. So much so the city’s collection and transfer of property taxes and water bills have been affected.

The hackers attacked the city’s servers with a new type of ransomware known as “Robbinhood,” and are demand a 13 BTC ($102,900) ransom to stop the whole attack. They also gave the city the option to pay 3 BTC ($23,700) to decrypt a specific system.