Bitcoin plunges as cyber attack in South Korea steals £28m
BITCOIN’S price came close to a six-month low yesterday after a South Korean cryptocurrency exchange suffered a cyber attack.
The price of the digital currency fell by as much as 10pc after the Coinrail website confirmed a “cyber intrusion” that saw around 30pc of its currencies stolen with an estimated value of 40bn won (£28m).
It led Bitcoin’s price to fall as low as $6,650, close to the currency’s lows in early April, while other cryptocurrencies also dropped. The last time Bitcoin has traded below $6,600 was last November, shortly before its price exploded to $20,000. Since the start of the year, its price has more than halved.
The hack was unfortunate timing for the cryptocurrency mining company Argo Blockchain, which announced plans yesterday to become the first business of its kind to join the London Stock Exchange.
Argo plans to raise £20m at a valuation of £40m to launch a “mining as a service” package in which cryptocurrency enthusiasts would pay the company to digitally mine coins, but share in the proceeds.
Cryptocurrency mining involves high-powered computers repeatedly solving the cryptographic equations that maintain the underlying network, but the activity requires upfront investment.
Argo says it has mining operations in Quebec up and running, where it benefits from cheap energy, and has a deal to open a centre in China. It said its service, which will mine cryptocurrencies such as Ethereum and Bitcoin Gold, a spin-off of the original, will cost as little as $25 (£19) a month.
The company’s chief executive Jonathan Bixby said he was not concerned that yesterday’s cryptocurrency crash would affect demand for his business, since a price fall would mean fewer miners, and thus greater returns for those that continue.
“More than 90pc of the market is controlled by industrial scale miners, we think there’s a huge opportunity for mining as a service to the masses,” he said. The company, set up last year, recently raised £2.5m from angel investors in London.
Mr Bixby said he had chosen to list the company in London as it is the “fintech capital of the world”.