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article imageCryptocurrency exchange Youbit to close after second hack attack

By James Walker     Dec 19, 2017 in Technology
The South Korean cryptocurrency exchange Youbit has announced it will shut down its marketplace. The company has been hacked for the second time in the past year. Cybercriminals made off with 17 percent of Youbit's assets after raiding its exchange.
Youbit, previously known as Yapizon, was first hacked back in April when around 4,000 Bitcoins were stolen by attackers. The haul would be worth around $73 million (£55 million) today. The Yonhap News Agency reports Youbit was targeted again more recently. Thieves managed to steal 17 percent of the company's remaining cryptocurrency reserves.
The case is under investigation by South Korea's Internet and Security Agency. It is not known how the hackers obtained access to Youbit's cryptocurrency vaults.
After the April attack, the company said it would improve security to stop similar incidents occurring again. Youbit told customers it is "very sorry" about the closure and will allow users to make partial withdrawals.
"To minimize the damages to our customers, we will allow them to withdraw about 75 percent of their balance," the Yonhap News Agency reports Youbit said.
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The 75 percent withdrawals will allow long-term investors to retain a sizeable share of their profits. The incident is a significant setback for the cryptocurrency markets though. It's another reminder that the spiralling value of cryptocurrencies has turned exchanges into major targets for criminals.
Increasing numbers of cyberattacks are attempting to infiltrate large exchanges. Hackers are also coming up with ways to surreptitiously mine cryptocurrencies. Some malware authors have started to develop website scripts that turn visiting devices into silent mining agents.
Recently, the CEO of cryptocurrency exchange Coinbase reminded users of the risks. Cryptocurrency investors are often attracted to the anonymous nature of exchanges and the opportunity to make quick profits. However, these same attributes make cryptocurrencies a lucrative target for criminals. They also leave investors with no protections in case things do go wrong.
Most banking experts advise regular investors to stay within the regulated banking sector instead of putting money into cryptocurrencies. Youbit's shutdown won't help cryptocurrencies to establish themselves as stable alternative assets, although the ongoing Bitcoin rally is attracting new investors. Youbit said it will be contacting customers as the investigation moves forward.
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