Cryptocurrencies lose more than $42B following hack, regulatory crackdown

Cryptocurrency prices have fallen under pressure following a weekend report that the South Korean cryptocurrency exchange Coinrail was the victim of a hack.

Bitcoin has dropped about 12% since Friday. According to Bloomberg, weekend losses shaved $42 billion off of the cryptocurrencies’ market value.

Losses accelerated over the weekend after the South Korean cryptocurrency exchange Coinrail said it was the victim of a hack.

Coinrail posted a statement on the main page of its website reading: “On June 10, there was a system check due to the hacking attempt at dawn. At present, 70% of your coin rail total coin / token reserves have been confirmed to be safely stored and moved to a cold wallet and are in storage.”

According to The Guardian, South Korean news outlet Yonhap News estimated that about $40 billion worth of virtual coin was stolen.

News of the cryptocurrency cyberattack comes after The Wall Street Journal reported on Friday that the U.S. Commodity and Futures Trading Commission (CFTC) subpoenaed four cryptocurrencies to obtain data as part of an investigation into market manipulation.

According to the Journal, the CFTC wants comprehensive trading data from Bitstamp, Coinbase, itBit and Kraken, after they refused to hand over such information to the Chicago Mercantile Exchange (CME).

Bitstamp, Coinbase, itBit and Kraken serve as a base for the bitcoin futures price listed by CME Group. The CME had previously requested detailed trading information from the four crypto companies, which they initially rejected. In the end, they agreed to submit some trading data, a few hours’ worth of a limited amount of market participants. The CME originally requested a full-day’s trading activity.

Sources familiar with the matter told the Journal that the CFTC issued the subpoena because it was upset that the CME wasn’t successful in its request to access the exchanges’ data.

The CFTC supervises the CME and approved its listing of bitcoin futures in December 2017.

In late May, Bloomberg reported that The U.S. Department of Justice launched a criminal investigation into cryptocurrency traders who may have manipulated the market using illegal trade tactics such as sending large numbers of bogus orders.