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Yet another cryptocurrency exchange opens, crashes

Jan 06,2018
A new cryptocurrency exchange with supposedly stronger security debuted Friday, triggering heavy trading that led to a temporary outage on the first day.

Korea Coin Market and Invest Development, or Komid, went down for several hours after its opening at 9 a.m.

The platform claimed a flood of around 100,000 customers led to unstable server conditions, underscoring the continuing craze for digital currencies despite the government’s efforts to calm the fervor.

On its website, Komid highlighted its vigilance about security, though the operator declined to answer the Korea JoongAng Daily’s call for further details.

“Komid tried to prevent hacking attempts by separating networks,” the website noted, “We also installed a Hardware Security Module to strictly protect clients’ cryptographic keys against compromise.”

A Hardware Security Module is a physical computing device designed to safeguard digital keys for authentication.

Five cryptocurrencies - bitcoin, bitcoin cash, Ethereum, Ethereum Classic and Litecoin - are being traded on the new exchange.

The government has banned the issuance of new virtual accounts for cryptocurrency exchanges, while only real-name bank accounts and matching accounts at cryptocurrency exchanges can be used for deposits and withdrawals.

The Ministry of Justice even proposed an all-out shutdown of cryptocurrency exchanges last week, though the chance of that happening is slim.

Recurrent server collapses at major exchanges cause inconveniences to users, as there is no way to file for damages over losses incurred by technical glitches.

Platforms such as the country’s largest, Bithumb and Upbit, suffered a series of temporary outages, prompting some users to file lawsuits.

Personal details on 30,000 customers were also stolen from Bithumb, resulting in the theft of funds from their bitcoin and Ethereum accounts last year.

In Korea, there are about 30 cryptocurrency exchanges and more are planning to open in the first half of this year.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]