Bithumb Reports $180 Million Loss After Recent Hack

The crypto exchange Bithumb that was hacked in March this year and later urged its users to be extremely cautious before depositing recently reported a $180 million loss. In the latest altcoin news, we find out more.

Bithumb had a rough time with the reduced volume which happened during the prolonged bear market according to the Korea Times.

Not even a year went by, Bithumb was hacked once again in March this year and twice as many funds went missing this time. The report that came out later this year showed that the exchange was likely reporting fake volumes. The users decided to go to other exchanges with higher security and better track record. The exchange even fired many of its staff in January during the harsh bear market.

It’s important to notice that the price of cryptocurrencies does affect the exchanges. Fees are usually collected after the trades happen. Trades happen regardless of the cost so if an exchange collects its fees in the traded currency, the value of that currency could likely affect profitability. This is why exchanges have a plan B if anything goes wrong.

The results from the investigation are still not available but it is clear that the funds were stolen. Luckily only the exchange’s funds were lost and the users’ funds are reportedly safe which some believe this to be an inside job.

The drama with exchanges such as Cryptopia, QuadrigaCX, and Bithumb just shows how important decentralized exchanges are. Non-custodial solutions are showing up on the market. These solutions do have issues as well. For example, all users must have exceptional knowledge of cryptocurrency. The exchanges of this kind could be difficult to be accepted by the users.

Bithumb stated that things are looking better:

 “In terms of sales, we saw a 17 percent increase, and we continue to increase overseas investments.”

The decentralized exchanges could become a threat to traditional exchanges but they still need high-frequency trades and higher volume. For traders who conduct multiple traders a day, which could affect the choice of these kinds of traders.

The developments remain unclear so we have to wait and see the preferred model for a cryptocurrency exchange.