Exchanges face limits in repelling hackers

South Korean cryptocurrency exchanges have limits in protecting themselves from hackers as the government would not introduce regulations to protect them.

Cryptocurrency exchanges worldwide lost more than one trillion won from hacking this year, up 250 percent from last year, according to the CipherTrace.

South Korea’s Bithumb lost 35 billion won from hackers. Hackers also took out 570 billion won from Japan’s Coincheck this year.

The domestic exchanges are taking multiple steps to upgrade their cybersecurity.

They get the Internet Security Management System (ISMS) certificates from the government-funded Korea Internet Security Agency (KISA)

They are partnering with security solution providers, and separate their exchange trading system from their main networks. They want the government to legislate regulations to protect them from hackers.

Hacking is quite troublesome for the exchanges. Hacking tarnishes their images, reduces trading volume and keep banks from opening accounts.

In the Dec.10 seminar at the National Assembly, Upbit CEO Lee Sir-goo hoped that the government would introduce regulations to protect the exchanges from hackers.

Upbit, Gopax, and Korbit have received ISMS certificates. The certificates do not mean that the exchanges are 100 percent proof from hackers. The exchanges are far below the financial institutions such as banks in the degree of Internet security.

The government has no intention of classifying the exchanges as financial institutions and monitoring their cybersecurity.

The exchanges are likely to be the constant target of hackers even next year.