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Youbit files for bankruptcy after second cache of Bitcoins is swiped

KOREAN CRYPTOCURRENCY EXCHANGE Youbit has filed for bankruptcy after being hacked for the second time in a year.

The South Korean company says it lost 17 per cent of its assets in the attack, though it declined to admit what that meant in real-money terms.

Kisa, the organisation that investigates cybercrime in Korea, has begun an enquiry into how the hack was allowed to take place.

Youbit, lost 4,000 bitcoins in April, when it was still known as Yapizon. Today, those coins would be worth £55m.

North Korea is never far from suspicion in these matters and sure enough, and it looks like this is a get-rich-quick scheme from over the border, similar to those recently committed on the Bithumb and Coinis exchanges, which also lost out recently.

The concern is currently that the spiralling cost of Bitcoin could result in exchanges not being able to cover their losses. And while people love the anonymous nature of the platform, it also leaves them light on insurance.

Ilia Kolochenko, CEO of web security company High-Tech Bridge, said:
“This is a sad reality of Bitcoin. Offering unprecedented growth and ROI, it also brings the risks of your investment vaporisation. Unlike the heavily regulated banking sector, where innocent victims may count on some protection and remedy from the government, victims of Bitcoin security incidents virtually have no legal means to be compensated.

Youbit has told users that it would be able to give customers back 75 percent of their investment. Longer-term investors will still take a tidy profit away, but will equally have suffered agonising losses.

Bitcoin has now dipped from its $20,000+ high, but if there is a bubble, it shows no sign of bursting completely. But with events like this on the rise, it may be the associated risks of Bitcoin that pop it, if anything does.

Youbit is, apparently “very sorry”. µ

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