Bitcoin plunges as cy­ber at­tack in South Korea steals £28m

The Daily Telegraph - Business - - Technology Intelligence - By James Tit­comb

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”.


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