Crypto Market Rebounds, Bithumb Drives Kimchi Premium Up 50%
Bithumb, formerly the biggest crypto exchange in South Korea, has driven the Kimchi Premium up 30 percent on major tokens, inflating the price of cryptocurrencies. On June 20 Bithumb was hacked for $40 million. The Financial Services Commission (FSC) and Korea Financial Intelligence Unit (KFIU) were involved in the investigation of the Bithumb hack and eventually, the exchange reportedly recovered half of the stolen funds stored in digital assets.However, since then, for more than a month, Bithumb has disabled deposits and withdrawals, only allowing existing users on the Bithumb platform to trade cryptocurrencies. The unforeseen prevention of deposits and withdrawals led the premium on Bithumb to rise substantially, affecting both the local market and the global cryptocurrency exchange market. It is possible that the prices of cryptocurrencies spiked on Bithumb due to an influx of buyers and lack of sellers on the platform, given that no new capital could have been injected to the Bithumb trading platform since June 20. Since Bithumb does not have support for stablecoins like Tether, the only option for traders is to switch around tokens and major digital assets like bitcoin and ether.