Bithumb EOS/XRP Hack

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Bithumb Website/Logo

This hacking took place after a government security inspection by South Korea. EOS and Ripple tokens were taken from presumably insecure wallets. As is the typical case, this is yet another case where tokens were taken from a wallet without multi-sig.

This exchange or platform is based in South Korea, or the incident targeted people primarily in South Korea.

About Bithumb

“Bithumb, South Korea’s largest crypto exchange platform"

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

"was hit by hackers in March and lost about $19.2 million with EOS accounting for $13 million and about $6.2 million worth of XRP.

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Bithumb EOS/XRP Hack

Date	Event	Description
July 13th, 2018 2:05:39 PM MDT	YOUniversityTV Article About Exchanges	YOUniversityTV reports that the Korean Blockchain Association (KBA), a prominent self-regulatory body in the Korean cryptocurrency industry, is facing skepticism regarding its inspection standards and quality control. The organization recently conducted inspections of 12 local cryptocurrency exchanges, using third-party service providers to carry out the proceedings. Notably, the inspections did not include hacking simulations, a crucial aspect given the prevalent security concerns in the crypto space. Despite this, an unexpectedly high approval rate of 12 out of 14 exchanges was reported, meeting the industry standards set by the KBA. Chairman Jhun Hai-jin acknowledged security issues in some exchanges but affirmed that the approved platforms met the minimum acceptable standards. However, he refrained from disclosing specific cybersecurity risks to avoid leaving the exchanges vulnerable. The KBA had previously faced criticism for extending the inspection period and has been under scrutiny, especially after the recent hacking incident involving one of the approved exchanges, Bithumb, which lost $30 million in digital assets.
March 1st, 2019 12:01:18 AM MST	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
April 30th, 2019	Carnegie Endowment for International Peace Inclusion	The incident gains inclusion into a list put together by the Carnegie Endowment for International Peace, labelled as "BitHumb Crypto Heist #4", noting it's "the fourth theft in two years" and that "[i]n August 2019, the UN Security Council Panel of Experts indicated DPRK-affiliated actors were behind the theft."
May 8th, 2019 6:27:07 AM MDT	Fintech Singapore Look Back	Fintech Singapore includes the Bithumb attack in their list of significant hacks, causing substantial financial losses and prompting concerns about security measures. In March of the same year, Bithumb, a Korean exchange, faced losses exceeding $13 million in EOS and $6 million in Ripple due to an insider-related accident. Other notable incidents include the Binance hack in May 2019, DragonEx losing $45 million, Cryptopia suffering an $18 million theft, and BitGrail's controversial hack involving around $195 million. The infamous Mt Gox hack in 2014 remains one of the largest, with around 850,000 bitcoins stolen, leading to the exchange's bankruptcy. The cumulative losses from these hacks in 2018 alone amounted to an estimated $867.45 million, underscoring the persistent challenges and risks within the cryptocurrency industry.
December 30th, 2019 5:00:00 PM MST	MyCrypto List Inclusion	The incident is included in a list of "Major Blockchain/Crypto Security Incidents" for 2019, published on the MyCrypto blog. The listing includes only the $13M USD in EOS and does not mention anything about the XRP theft.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

"The company suspected that the operation was carried out by an insider because of what it described as an “abnormal withdrawal”. The company said all lost funds were owned by Bithumb and no users were affected.”

The total amount lost has been estimated at $19,200,000 USD.

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

"The company suspected that the operation was carried out by an insider because of what it described as an “abnormal withdrawal”. The company said all lost funds were owned by Bithumb and no users were affected.”

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

In August 2019, the UN Security Council Panel of Experts indicated DPRK-affiliated actors were behind the theft.

The incident was included in the CryptoXDirectory list of hacks on cryptocurrency exchanges in 2019, SlowMist Hacked, and the BitcoinExchangeGuide.

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

Coming soon.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.