Coinrail Bounces Back After Shutdown, Will Reimburse Stolen Cryptocurrencies
South Korean crypto exchange Coinrail has reopened just over a month after suffering an attack which resulted in the theft of $40 million in cryptocurrencies. The exchange only serves domestic investors but gained worldwide notoriety when it was partially (and perhaps inaccurately) blamed for the mid-June crypto market crash. Coinrail is now offering compensation to its customers as well as tightened security on the platform:
The Coinrail service, which was suspended after the hacking incident, opens with a new look. Coinrail has been working on various measures to restore recovered cryptocurrency and normalize services after the occurrence of a hacking incident. Coinrail has been working on various measures to restore recovered cryptocurrency and normalize services after the occurrence of a hacking incident. — Coinrail via Google Translate
After details of the attack were revealed, the public expressed a great deal of hostility toward the exchange. Coinrail’s terms of service had been recently changed so that it was not required to compensate stolen funds. This led to some speculation that Coinrail may have been complicit in, or at least had prior knowledge of, the attack.
Despite the bad press, Coinrail claimed weeks ago that it would resume service on July 15th. General distrust caused many in the crypto community to believe that Coinrail would not meet its deadline for re-opening. Although the investigation is still ongoing, Coinrail has indeed reopened on time, and has begun a recovery process for users who have had coins stolen from their accounts.
Coinrail has announced two possible courses of action: one involves Coinrail using its profits to purchase new coins to replace the coins that have not been recovered. The other plan involves Coinrail compensating users’ stolen coins with its own RAIL token. Since these options are somewhat less than a total guarantee, users remain skeptical.
Coinrail’s handling of the attack is hardly unique: a similar attack occured on another South Korean exchange, Bithumb, just a week after the Coinrail attack, resulting in investigations into several exchanges. Whereas Coinrail quickly recovered two-thirds of the stolen coins, Bithumb recovered only recovered half of what was lost. Bithumb, though, quickly promised reimbursement to its users and had plans to add new security features.
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