Youbit hack: Bitcoin exchange forced to shut down after suffering second attack in 8 months

South Korean Bitcoin exchange Youbit has been forced to shut down after being hit by hackers for the second time in just eight months. The exchange was hacked in April and nearly 4,000 Bitcoins were stolen at the time – the stolen funds now amount to around $73m (£55m).

Youbit confirmed that it was hacked once again on 19 December and that hackers stole 17% of its total assets. However, the exchange is yet to specify the actual amount of funds stolen by the hackers. The firm also announced that it will file for bankruptcy. Youbit apologised to its customers in a statement, adding that the value of customers' cryptocurrency assets will be marked down to 75%.

"This is a sad reality of Bitcoin. Offering unprecedented growth and ROI, it also brings the risks of your investment vaporisation. Unlike the heavily regulated banking sector, where innocent victims may count on some protection and remedy from the government, victims of Bitcoin security incidents virtually have no legal means to be compensated," Ilia Kolochenko, High-Tech Bridge CEO, told IBTimes UK.

"Based on reliable blockchain technology, Bitcoin unfortunately remains vulnerable because of the surrounding intertwined technologies such as exchanges. While BTC price goes up, we should expect continuous growth of cybercrime targeting Bitcoin, its users, related platforms and exchanges," Kolochenko added.

The BBC reported that South Korea's Internet and Security Agency (Kisa) has begun investigating the recent cyberattack against Youbit. However, Kisa blamed North Korean hackers for the previous breach. Earlier this week, South Korea's spy agency, the National Intelligence Service (NIS), also blamed the proliferating North Korean hacker group Lazarus, for orchestrating attacks against several prominent South Korean cryptocurrency exchanges.

The Lazarus Group, apart from being actively involved in various cyberespionage campaigns, has targeted numerous cryptocurrency exchanges across the world. Security experts say the Lazarus Group has been stealing Bitcoins to make money for the impoverished regime as Pyongyang marches ahead with expensive nuclear tests.

"2018 has been a remarkable year for cryptocurrencies, with Bitcoin hitting heights that even the most optimistic spectators wouldn't have predicted. However, this has been matched in equal measure by an increase of attacks on the cryptocurrency ecosystem. This is far from limited to Youbit and cryptocurrency exchanges, this year we've seen attacks on cryptocurrency wallets, countless initial coin offerings (ICOs), and even the launch of new cryptocurrencies such Bitcoin Gold," Leigh-Anne Galloway, Cyber Resilience Lead at Positive.com told us.

"As cryptocurrencies continue to generate greater value and are adopted more widely, they will become an increasing target for cybercriminals who can smell out an opportunity to make a lot of money, very quickly."