CoinRail Exchange Hack

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This hacking took place after a government security inspection by South Korea, and the hack included a significant amount of bitcoin. As the issue was related to vulnerability in the platform, it’s safe to say that the funds were in a hot wallet. ERC20 tokens are especially challenging to secure as there is no native multi-sig system built in, and it can only be done through a risky smart contract. CoinRail displays presently as a “403 error” when viewed from most countries, however viewing from some countries such as Singapore appears to display the website.

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

About CoinRail

“Korea-based coin exchange Coinrail lost more than $40 million in altcoins (ICO-issued tokens) in an apparent weekend cyber heist. Most notably, the hackers got away with $19.5 million worth of NPXS tokens that were issued by payment project Pundi X’s ICO. On top of that crypto loot, “they scored a further $13.8 million from Aston X, an ICO project building a platform to decentralize documents, $5.8 million in tokens for Dent, a mobile data ICO, and over $1.1 million Tron, a much-hyped project originating from China,” "However, Coinrail only provided the names of some of the tokens that were taken in the alleged breach without disclosing the exact amounts at stake. These included the NPXS token from the Pundi X project, ATC from Aston and the NPER project’s NPER token." “The biggest hit was taken by payment processing startup called Pundi X, with around 3% of total NPXS token supply affected. The project’s team was very eager to cooperate by freezing the stolen tokens immediately and halting trading to help with the investigation.” “A total of eleven cryptocurrencies were stolen, Coinrail revealed. They are dent (DENT), tradove b2bcoin (BBC), ether (ETH), jibrel network (JNT), bitcoin (BTC), kyber network (KNC), storm (STORM), tron (TRX), pundi x (NPXS), aston (ATX), and nper (NPER). Funds in DENT, BBC, and ETH have been fully recovered; customers can start trading and withdrawing them. “Recovery [is] in progress” for JNT, the exchange detailed. The remaining seven cryptocurrencies have not been fully recovered, including BTC.” “A month later, on July 15, the exchange resumed trading and offered the victims two compensation schemes: a gradual refund through the purchase of stolen cryptocurrency and compensation with Coinrail RAIL tokens, which can then be converted into a cryptocurrency at the inner rate.”

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

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

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

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 - CoinRail Exchange Hack

Date	Event	Description
June 1st, 2018 12:01:02 AM MDT	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

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 total amount lost has been estimated at $40,000,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

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?

Ultimate Outcome

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

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.