South Korean cryptocurrency exchange to file for bankruptcy after hacking

Broken representations of the Bitcoin virtual currency, placed on a monitor that displays binary digits, are seen in this illustration picture, December 8, 2017. Picture taken December 8. REUTERS/Dado Ruvic/Illustration

SEOUL (Reuters) - A South Korean cryptocurrency exchange said on Tuesday it is shutting down and is filing for bankruptcy after it was hacked for the second time this year, highlighting concerns about security as trade in bitcoin and other virtual currencies boom.

The exchange, called Youbit, had been hacked once before in April when nearly 4,000 bitcoins were stolen in a cyber attack that the country’s spy agency linked to North Korea, according to a South Korean newspaper report on Saturday.

Youbit announced on its website that it had been hacked at 4:35am local time on Tuesday, causing a loss worth 17 percent of its total assets.

It did not elaborate on the amount, but said all customers’ cryptocurrency assets will be marked down to 75 percent of its value, adding it has stopped trading and will work to minimize customer losses.

Youbit is a smaller player in South Korea’s cryptocurrency market, with the world’s busiest cryptocurrency exchange Bithumb accounting for about 70 percent of the country’s market share.

An official at Korea Internet & Security Agency (KISA), the state agency that responds to cyberattacks, said the police and KISA officials were starting an investigation into the hacking.

Bitcoin exchanges and wallets have a history of being targeted, and security experts say they become more vulnerable to cyber-crime as valuations rise.

Bitcoin traded near record high at $18,759.67 on the Luxembourg-based Bitstamp exchange as of 0703 GMT.

Reporting by Joyce Lee; Additional reporting by Heekyong Yang; Editing by Shri Navaratnam