Bithumb, Korea’s second largest crypto exchange and the world’s fifth largest by daily volume, is to reopen new registrations after more than a month’s hiatus. New accounts services were suspended indefinitely on July 31st in response to June’s security breach where hackers made off with 35 billion won ($31 million). It’s expected the exchange will resume its full range of services within as little as a week.
Crypto exchanges in South Korea are required to have working partnerships with banks or financial services institutions in order that traders can deposit and withdraw funds. Bithumb had been working with NH Noghyup Bank, one of Korea’s leading financial institutions, but the bank severed the agreement, claiming that Bithumb “has problems in protecting consumers,” emply demonstrated, it would seem, by June’s security breach. But it seems that recent interventions by authorities in South Korea, culminating in endorsements of both UPbit and Bithumb’s security reforms, may have reinstated trust, as NH Bank have agreed to continue providing virtual banking services for the foreseeable future.
It’s been a challenging year for crypto in South Korea, with both Coinrail and Bithumb suffering hacks. In addition there were widespread accusations of malpractice earlier in the year, most notably directed toward UPbit, the country’s largest exchange. The impact was disastrous, and indeed trading levels dropped significantly across Korea as a result. At Bithumb alone daily trading volume crashed from around $350 million on July 31st to just $71 million by August 23rd. The impact was not only on new users, but for all traders who had lost confidence in the exchange’s ability to provide even the most basic services. But now new users will again be welcomed to the exchange, and there are signs the Korean crypto sector might emerge stronger than ever before.
