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Cryptocurrencies tumble after S. Korea hack

HONG KONG: Cryptocurrencies plunged in Asia yesterday after a hack on a South Korean exchange sparked fresh concerns about the safety of the digital units.

The attack on Coinrail comes months after Japanese firm Coincheck said it had lost more than US$500 million (S$667m) in a January hack.

Coinrail did not specify the value of the currency that was taken in the attack at the weekend but said it was working with the authorities and other coin developers to track down the culprits.

The firm, which trades more than 50 cryptocurrencies, added that it had frozen all exposed coins - Fundus X, Aston, and Enper - and other units had been taken offline in a "cold wallet".

The news sent cryptocurrencies tumbling, with bitcoin losing about 13 per cent, ethereum down 12 per cent and ripple almost 20 per cent lower with traders fretting over the safety of their investments.

"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," said Mr Stephen Innes, head of Asia-Pacific trade at Oanda.

"The markets are so thinly traded, primarily by retail accounts, that these guys can get really scared out of positions," he said. "It actually doesn't take a lot of money to move the market significantly."

Cryptocurrencies have plunged since the end of last year, when bitcoin hit a record high near US$20,000, having surged from less than US$1,000 just 11 months earlier. It is now worth around US$6,780.

South Korea is one of the biggest markets for trading in digital currencies but the boom has forced the government to tighten regulations, following similar moves in other countries.

In February, Japan carried out raids on exchanges following the Coinbase hack, which exceeded the US$480 million in virtually currency stolen in 2014 from another Japanese exchange, MtGox. - AFP

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