Yapizon

On April 22, 2017, Yapizon, a prominent South Korean cryptocurrency exchange, suffered a crippling blow when hackers, later linked to North Korea by the National Intelligence Service, plundered 3816 BTC, valued at roughly $5 million with Bitcoin priced at $1310 per coin, according to CoinGecko. The attack, striking between 2:00 and 3:00 a.m., compromised four hot wallets, which held 37% of Yapizon’s Bitcoin reserves, as outlined in a statement translated by CCN. Swiftly halting operations, Yapizon filed complaints with Seoul’s Cyber Investigation Division, its website dark for days, as noted by HackRead.

In a divisive decision, the exchange opted to spread the loss evenly, slashing all user balances by 37%, a move that ignited fury among unaffected traders on Reddit and BitcoinTalk, where user bL4nkcode flagged fears of an exit scam. To mitigate the damage, Yapizon issued Fei tokens, equating one token per $78 of loss, tethered to future profits projected at $1.8 million annually, though murky calculations hinted at a two-year recovery timeline, lagging far behind Bitfinex’s eight-month restitution after its 2016 hack. With no stolen funds reclaimed and 2017’s sparse regulatory framework offering scant relief, the breach, covered by Reuters and CoinTelegraph, laid bare the risks of hot wallet storage, spurring calls for cold storage solutions, multi-signature security, and clear compensation strategies to rebuild trust in South Korea’s vibrant crypto landscape.