South Korean Exchange Hacked, Bitcoin Plummets Below $7,000
exchange called Coinrail was hacked. According to a statement released by Coinrail, their platform experienced what they are calling a “cyber intrusion”, an event that resulted in the theft of about 30 percent of the coins traded on the exchange. In the hours following the hack, bitcoin dropped over $500, bottoming out at $6,720 on Sunday according to LiveCoinWatch.com.
The price has recovered slightly but with investors in every market concerned about potential security risks, people are slow to return and trading volumes have decreased significantly across the board. We will likely see a gradual return to a level above the $7,000 mark in the near future but with each security breach, the need for more stringent measures, regulatory involvement, and even government oversight become more apparent.
Relatively speaking, this was by no means the most coins lost in a single hack but the continued prevalence of these massive breaches in security may lead people in the community to support the imposition of more widespread regulation. A move that would greatly increase the confidence people have in the cryptocurrency market. Continuing down this path of regulatory uncertainty where a criminal can breach the security of a trading platform and the government can do nothing to step in and protect the consumer would mean the end of cryptocurrency adoption.
What makes matters more complicated, several exchanges are under investigation for potential price manipulation on their platforms, making their users buy coins at artificially inflated values. Companies like Coinbase, Kraken, Bitstamp, and itBit have been told they need to share all trading data connected to Bitcoin Futures contracts since the shorting of those contracts at the end of December were partly responsible for such a massive drawback in price. Until people start filtering back into a market that has been stabilized by some form of a regulatory framework, we might continue to see a continuation of this bear cycle we are in.