Youbit declares bankruptcy after computer attack

A cryptocurrency platform in South Korea reported on Tuesday that it was going to close and declare bankruptcy after suffering a cyber attack for the second time this year, which raises concerns about security in a market of continuous increase in transactions in bitcoins and other virtual currencies.

Youbit had already been breached once before in April, when nearly 4,000 bitcoins were stolen in a cyber attack that the country's spy agency linked with North Korea, a South Korean newspaper reported Saturday.

Youbit announced on its website that it had been hacked at 4:35 in the morning local time on Tuesday, in an attack that caused losses equivalent to 17% of its assets.

The entity did not give more details about the damage, but said that the value of all the assets of its clients would be reduced by 25%, adding that the bitcoin exchange had stopped and that it would try to minimize the losses of the clients.

Youbit is a small player in the cryptocurrency market in South Korea, where Bithumb, the world's leading cryptocurrency platform, has a market share of 70 percent.

An official with the Korean Internet and Security Agency (KISA), the state agency responding to cyber attacks, said police and KISA officials were beginning to investigate hacking.

Bitcoin bags and portfolios are a popular target for attacks, and security experts say they have become more vulnerable as the value of cryptocurrencies rises.

At 11:50 GMT, bitcoin traded down 5.38% to 17,922.30 dollars in the Bitstamp market, based in Luxembourg