Hacker Fright or Flight

It feels like every day we see another hack of a cryptocurrency exchange. One victim to examine is Coinrail, a South Korean exchange, that lost a purported $40 M in various tokens held at the exchange. The heist included the following tokens: $19.5 M tokens from the recent Pundi X ICO, $13.8 M tokens from Aston X, $5.8 M tokens from Dent, and $1.1 M tokens from Tron. Coinrail was been quick to move its remaining holdings (70%) into cold storage. Pundi and Aston also took action by freezing portions of their tokens to assist in preventing the hacker from selling of the stolen goods.

Another event that was tagged by media outlets as casually related to the Coinrail hack was the Bitcoin tumble of about 10%. CNN and Mashable both labeled the hack as the primary driver of Bitcoin value from $7,240 to $6,752. Adrian Lai, a founding partner at Hong Kong-based investment firm Orichal Partners, says, “Investors have been increasingly worried about cybersecurity issues…At this stage, obviously, the standard is not high enough.” However, other media outlets have pushed back.

One notable interview cited by CCN and CNBC with eToro senior market analyst Mati Greenspan points to key separations between the Coinbase hack and the Bitcoin tumble. Greenspan first points out how small Coinbase is relative to the crypto exchange space, stating “…there is absolutely no reason why this smash and grab job at a local boutique should have sent Bitcoin down by $1,000.” Greenspan instead points his finger at a technical correction, with the tumble occurring after Bitcoin dipped below the long-term trendline and moved closer to two key support levels.