The price of bitcoin dropped 7 percent on Monday after South Korean cryptocurrency exchange Coinrail confirmed that hackers have stolen nearly a third of its virtual currencies. Yet another cryptocurrency security incident has shaken investor confidence as U.S. regulators continue an investigation into cryptocurrency market manipulation.
Coinrail, which is a relatively small South Korean cryptocurrency exchange, has suspended all digital currency trading on its platform as it cooperates with investigators. In a statement, Coinrail said the theft did not involve well-known currencies such as bitcoin.
[See: 7 of the Best Stocks to Buy for 2018.]
The Coinrail incident in South Korea, one of the largest global cryptocurrency trading hubs, comes just days after the Wall Street Journal reported that U.S. regulators are investigating potential cryptocurrency price manipulation at other major exchanges. Those exchanges include Bitstamp, Coinbase, itBit and Kraken. In May, the U.S. Department of Justice launched a criminal investigation into bitcoin price manipulation focused primarily on market spoofing. Spoofing involves traders flooding the market with fake orders in order to artificially drive prices higher or lower.
The anonymous nature of cryptocurrency trading throughout much of the world has made it an attractive tool for criminals. A recent report by the University of Sydney and the University of Technology Sydney revealed that 25 percent of all bitcoin users and 44 percent of all bitcoin transactions were associated with criminal activity.
News of additional regulatory investigations and another cryptocurrency security incident sent bitcoin prices tumbling more than 7 percent on Monday morning to below $6,800. The price of bitcoin is down 49.8 percent so far in 2018.
[Read: What’s the Best Bitcoin Wallet?]
EToro analyst Mati Greenspan says the bearish move may not necessarily be tied to the Coinrail incident alone.
“There is absolutely no reason why this smash-and-grab job at a local boutique should have sent bitcoin down by $1,000,” Greenspan says. “More likely, what we’re seeing is more of a technical correction.”
Regardless of the reason, the Bitcoin Investment Trust (GBTC), which trades over-the-counter, was down 10.5 percent on Monday morning. The U.S. Securities and Exchange Commission has not approved any cryptocurrency funds for listings on major U.S. markets out of concern for investor safety. Last week, VanEck announced it is making its third attempt to launch an SEC-approved bitcoin exchange-traded fund.
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Bitcoin Crashes Following South Korean Hack originally appeared on usnews.com
