The prices of major cryptocurrencies nosedived on Monday after reports emerged that Coinrail – South Korean cryptocurrency exchange – has been hacked. The development has stoked fresh fears about the potential risks associated with trading in cryptocurrencies.
Coinrail did not disclose the exact amount of loss incurred due to last weekend’s hacking, but Bloomberg News claimed that the exchange lost cryptocurrencies of nearly worth $42 billion. The South Korean exchange said it is working with law enforcement authorities and other parties in order to nail down the real culprits.
Prices of bitcoin, ethereum and all other major cryptocurrencies had to take huge brunt due to fallout of Coinrail hacking. Bitcoin’s price tumbled by 13%, ethereum by 12% and ripple crashed by almost 20% during intra-trading.
Analyst claimed that markets reacted sharply to Coinrail hacking incident, since this is a second such incident that has taken place this year. In January, Japanese cryptocurrency exchange Coincheck reported that it lost cryptocurrencies of worth $500 million due to hacking.
The Asian markets also sharply reacted on Monday partly because South Korea is one of the biggest cryptocurrency trading markets and hacking community’s ability to breach into this critical market may have caused investors to raise the red flag.
The prices of most cryptocurrencies have been heading southwards since the beginning of this year, when bitcoin’s price touched record high of $20,000. Today the price of bitcoin is hovering around $6,780.
The massive crash in bitcoin’s price has partly validated the ‘bubble theory’ that most critics had floated last year. However, several supporters of digital coins continue to claim that cryptocurrencies are future of financial trading and digital currencies will continue to dominate the markets. But such predictions haven’t really gone done too well with governments and agencies as they continue to clamp down on cryptocurrencies.