The price of Bitcoin is back under $7000 after Korean exchange Coinrail confirmed a hack on Sunday. According to Stephen Innes, head of Asia Pasific trading at Oanda Corp. in Singapore, the $46 billion drop in the cryptocurrency market is a result of that hack in South Korea.
Although Coinrail is only a small exchange, fear of security on exchanges triggered the sell-off. ” This is ‘If it can happen to A, it can happen to B and it can happen to C’, then people panic because someone is selling”, Innes said to Bloomberg.
The fact that there was low market liquidity during the weekend wasn’t helpful either, Innes said. “The markets are so thinly traded, primarily by retail accounts, that these guys can get really scared out of positions. It actually doesn’t take a lot of money to move the market significantly”.
Coinrail had a 24 hour volume of about $2.65 million before the hack. The exchange confirmed the hack on Sunday, but there was no mention on what was stolen.
The cryptocurrency market is back under $300 billion following the news of the hack, with Bitcoin trading at $6796 at the time of writing.
UPDATE: It emerged that Coinrail’s name resembles the name of S. Korea’s national rail, which did nothing but complicate the matters further. It is hard to say whether the drops had any relation with this, but the confusion certainly created a gloomy joke on Korean citizens and traders alike:
Small South Korean cryptocurrency exchange Coinrail experienced a $40 million hacking attack.
Local users mistook Coinrail for Korail (national railroad operator in Soith Korea) and panicked, thinking they couldn't get home because of a Korail hack.
Made my laugh out loud
— Joseph Young (@iamjosephyoung) June 11, 2018