Bithumb, one of South Korea’s largest cryptocurrency exchanges, once stood as a symbol of the country’s rapid embrace of digital assets. With millions of users and billions of dollars in trading volume, it rose to dominance in Asia’s highly competitive exchange market. But its success was shadowed by a troubling pattern: repeated hacks that compromised user funds, exposed systemic security gaps, and eroded trust.
Between 2017 and 2019, Bithumb was targeted multiple times, losing tens of millions of dollars in digital assets. The string of breaches made global headlines and drew intense regulatory scrutiny, transforming the exchange from a pioneer into a cautionary tale.
This article explores the timeline of Bithumb’s hacks, the vulnerabilities that enabled them, the market impact, and the lessons they offer for the future of crypto security.
The Rise of Bithumb
Founded in 2014, Bithumb quickly became one of South Korea’s dominant exchanges. By 2017, it was handling billions in daily trading volume, often ranking among the top five exchanges worldwide. The platform offered a wide selection of cryptocurrencies, rapid onboarding for retail users, and an early advantage in one of the world’s most active crypto markets.
However, as the exchange grew, so did its appeal to hackers. Centralized platforms like Bithumb manage enormous hot wallets—cryptocurrency wallets connected to the internet to facilitate quick transactions. While convenient, these wallets are vulnerable to exploitation. Bithumb’s dependence on such systems would prove to be a recurring weakness.
The 2017 Breach: A Trojan Horse in the System
The first major incident struck in 2017. Hackers accessed the personal computer of a Bithumb employee, infiltrating sensitive information outside the company’s secure infrastructure. User data and funds were compromised, and millions of Korean won were reported lost.
Although relatively limited compared to later attacks, the 2017 breach revealed two critical issues: weak endpoint security and insufficient separation between personal devices and exchange systems. For many observers, it was a warning sign. For Bithumb, it was only the beginning.
February 2017: A $7 Million Loss and State-Sponsored Threats
Around the same year, another attack struck Bithumb, this time with losses exceeding $7 million. Intelligence sources linked the attack to the Lazarus Group, a North Korean cyber-espionage unit infamous for targeting banks and financial systems.
This revelation highlighted a new dimension of risk: cryptocurrency exchanges were not only attractive to opportunistic hackers but also to state-sponsored groups seeking to evade sanctions and acquire foreign currency. Bithumb had become part of a geopolitical struggle.
June 2018: The $30 Million Heist
In mid-2018, Bithumb faced its most damaging breach to date. Hackers infiltrated hot wallets and siphoned off approximately $30 million worth of cryptocurrencies.
The immediate response was to suspend all deposits and withdrawals and to transfer remaining funds into cold wallets—offline storage considered safer against hacking attempts. While Bithumb pledged to reimburse users, the breach triggered outrage among customers and rattled South Korea’s crypto market.
Investigations later revealed that Bithumb had failed to maintain strong internal controls. Network segregation was weak, monitoring systems were inadequate, and access to wallets lacked rigorous oversight.
March 2019: Insider Involvement Suspected
Early in 2019, Bithumb was hit again. This time, hackers targeted EOS and XRP wallets, stealing tokens valued at about $20 million. Unlike previous incidents, the 2019 hack raised suspicion of insider involvement.
Bithumb admitted that the theft might have come from within, pointing to weak verification and monitoring of staff activity. This revelation was particularly alarming because it showed that the greatest threats did not always come from external actors—sometimes they were inside the company itself.
June 2019: Another $30 Million Loss
Just months later, Bithumb endured yet another major breach, losing an additional $30 million. The exchange again suspended services and shifted funds to cold wallets, but the damage was already done.
Repeated breaches in such a short span exposed a failure to learn from earlier attacks. Investors began questioning whether Bithumb could ever provide the level of security necessary to safeguard digital assets on a global scale.
Underlying Causes of Repeated Hacks
Bithumb’s repeated misfortunes were not merely the result of bad luck. They reflected structural weaknesses:
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Overreliance on hot wallets
Bithumb frequently held large reserves in hot wallets for transaction speed, leaving too much exposed to online threats. -
Weak internal governance
Insider involvement and poor verification processes created risks from within. -
Reactive, not proactive, security
Bithumb often acted after incidents rather than preventing them, moving funds to cold wallets only after hacks occurred. -
Regulatory blind spots
At the time, South Korea had limited oversight of exchange security practices, allowing vulnerabilities to persist without accountability. -
Erosion of customer trust
Each hack compounded public perception that Bithumb lacked the ability—or willingness—to reform.
Market and Regulatory Fallout
Bithumb’s repeated security failures forced regulators to act. South Korea’s Ministry of Science and ICT launched audits of the exchange, requiring stronger data protection measures and adherence to Information Security Management System (ISMS) certification.
Meanwhile, Bithumb’s once-dominant market share began to shrink. Rivals like Upbit and Korbit attracted users with promises of stronger security and more transparent practices. The string of hacks accelerated this migration, leaving Bithumb struggling to restore its reputation.
Bithumb’s Attempt at Recovery
After multiple high-profile breaches, Bithumb undertook a series of reforms designed to rebuild trust:
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Adoption of ISMS standards.
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Implementation of two-factor authentication for all users.
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Expansion of cold wallet storage.
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Deployment of enhanced monitoring systems to detect suspicious activity.
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Strengthened staff verification processes to address insider threats.
Although these measures helped stabilize operations, the exchange never fully regained the prestige it once held. For many users, Bithumb had become synonymous with insecurity.
Lessons from the Bithumb Saga
The repeated hacks of Bithumb hold critical lessons for both exchanges and investors:
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Hot wallets are inherently risky
Exchanges must minimize hot wallet balances and ensure strong segregation from internal networks. -
Insider threats must not be overlooked
Strong governance and employee vetting are as important as firewalls and encryption. -
Security requires constant evolution
Threat actors adapt quickly; exchanges must invest in ongoing upgrades, audits, and penetration testing. -
Customer trust is fragile
A single hack can dent reputation, but repeated failures can destroy it entirely. -
Regulation is necessary
Without oversight, exchanges may prioritize convenience over safety, exposing users to unnecessary risks.
Broader Impact on the Crypto Industry
Bithumb’s struggles had ripple effects far beyond South Korea. They contributed to global skepticism about the safety of centralized exchanges, driving demand for:
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Cold storage solutions for individual investors.
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Decentralized exchanges (DEXs) that reduce reliance on custodians.
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Proof-of-reserves audits as a standard for transparency.
The saga also underscored the importance of insurance for digital assets, with many exchanges introducing partial coverage after high-profile hacks.
Timeline of Key Hacks
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2017: Employee computer hack; user funds and data compromised.
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2017 (Feb): $7 million stolen, linked to state-sponsored Lazarus Group.
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June 2018: $30 million lost from hot wallets.
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March 2019: $20 million stolen in EOS and XRP, insider involvement suspected.
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June 2019: Another $30 million hack exposes continued vulnerabilities.
Conclusion
Bithumb’s history of repeated hacks between 2017 and 2019 remains one of the most striking examples of how even leading crypto exchanges can falter when security is neglected. Each breach revealed deeper flaws—overreliance on hot wallets, weak governance, and inadequate anticipation of evolving threats.
Although Bithumb made reforms and continues to operate, its reputation has never fully recovered. The lessons it left behind are enduring: security must be proactive, governance must be strong, and customer trust, once lost, is nearly impossible to regain.
In the fast-moving world of cryptocurrency, Bithumb’s experience is a lasting reminder that success can vanish in an instant if security is not treated as the highest priority.
