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Youbit, comes back to light with its insurance controversy in South Korea

Apr 01, 2018 Posted /  1322 Views

Youbit, comes back to light with its insurance controversy in South Korea

A crypto-currency exchange in South Korea, Youbit was shutting down after it was hacked for the second time in less than eight months. This is not the first time hackers had imparted a major blow to Youbit’s hot wallet reserves. Back in April, when it still bore the name Yapizon, the exchange lost 3,186 Bitcoin in a similar attack. The funds, worth around US$5 million at the time, are now valued at over US$55 million.

DB Insurance, one of South Korea’s biggest property-and-casualty insurers, has denied the claim of 3 billion won (~USD$280 million) by Yapian, the operator of Youbit, local media reported on Thursday. The insurer asserted that Yapian “violated the ‘advance notice obligation’” which requires the company to disclose important information prior to obtaining insurance, Asia Today explained. The news outlet added that this information is used to calculate premiums, and quoted a DB Insurance official saying: As the amount of insurance money is large, we expect Yapian to file a lawsuit.

The South Korean exchange will close and enter bankruptcy proceedings after it was hit by a cyberattack, its parent company, Yapian, said in a statement. About 17% of total assets were lost. The robbery follows an "accident" in April, after which Yapian encouraged clients to keep their tokens in a safer form in cold wallets.

South Korea's Internet and Security Agency (Kisa) which investigates net crime, said it had started an enquiry into how the thieves gained access to the exchange's core systems. It blamed the earlier attack on Youbit on cyber-spies working for North Korea. Separate, more recent, attacks on the Bithumb and Coinis exchanges, have also been blamed on the regime. No information has been released about who might have been behind the latest Youbit attack.

In a statement earlier, Youbit had said that customers would get back about 75% of the value of the cryptocurrency they had accommodated with the exchange. The exchange added that the hackers did not manage to steal all the digital cash it held because a lot was lodged in a "cold wallet" - a secure store used to hold the assets that were not being traded. However, Youbit was one of the smaller exchanges active in South Korea. The majority of Bitcoin trading in the country is done on the Bithumb exchange which has a 70% market share.

More and more cybercriminals have tried to cash in on the boom in virtual currencies such as Bitcoin. Many have created malware that seeks to use victims' computers to create or "mine" valuable currencies. Others have simply attacked exchanges and other crypto-cash service firms to get at large numbers of bitcoins at once.

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