One of the leading crypto exchange firms of South Korea, Bithumb experienced various hacks, leaked financial information of users and led the firm to lose a huge amount. Due to this, South Seoul’s Prosecutor office filed a lawsuit against the crypto firm.
Bithumb noticed the first hack in 2017 and continued experiencing hacks every year. Now, the crypto exchange giant Bithumb and its top executives are sued and charged with failure to safeguard user information and leaked user private data and failed to take necessary steps against hacking incidence.
Prosecutor claims Bithumb leaked private information of 31,000 users. A local media outlet of South Korea, ZDNet Korea mentions, Security violation was the main reason for the Bithumb hack in 2017. The crypto-hackers managed to uplift huge funds from its crypto platform.
The prosecutor further accuses the exchange, saying the crypto exchange was unsuccessful in implementing necessary steps to protect user sensitive data. This led the hackers to steal cryptocurrency of millions from its platform; a crypto source reported the news.
Prosecutors also claim that the Bithumb second hack was due to data leakage, and this resulted, the crypto exchange to lose around $ 7 million of cryptocurrencies. Bithumb was once again hacked in June 2018, and this time the hack made the exchange for losing $31 million from its platform.
Earlier, a crypto source reported that Bithumb informed about the data breach incident to its official, in the last week of June 2017. The first hack incidence affected nearly 31,000 user accounts of Bithumb.
How Hack Incidence Occurred?
The prosecutor believes that the affected data of around 31,000 users were placed on a single computer of Buthumb’s employee. The employee failed to run antivirus software on the PC and even failed to install important security updates. For this Bithumb’s behavior, the crypto exchange is accused under an article of South Korea’s Information Communication Network Act, the source reported.
The Information Communication Network act states that information and communication services providers are required to develop significant measures so as to protect the user’s private information.
2017 Bithumb Hack incidence, leaked important information of 31,000 customers such as email address, cell number, user names, and crypto transaction details. However, Customer ID’s and passwords were not affected.
The prosecutors are alleging of a link between the data breach and the hack incidence and said,
We submitted [Bithumb’s] case to the court because of personal information with…. The economic value was leaked on a large scale, and then further damage occurred.
Bithumb Offers Apology
Back on 19th April 2019 Bithumb, for the first time asked apology from its customers and said the company will everything it can to protect user information. The exchange representatives declined any connection between these incidents. Bithumb’s spokesperson responded to prosecutors claim saying
We respect the opinion of the prosecution, but the 2017 hack was not related to any personal information leak or theft of customers’ cryptocurrency holdings.
Bithumb’s Sequence of Hack Incidence
For the third time, Bithumb once again experienced hack in 2019. This time the hackers took away $13 million of digital currencies. However, the management claims the hack would be the job of an insider, and the investigation is still under process.
Due to this spring hack, Bithumb appointed a separate auditor; the auditor was responsible for carrying an audit of Bithumb funds. The auditor mentioned that the stolen cryptocurrencies belonged to company’s fund and the remaining cryptocurrencies were moved to cold wallet.