South Korean cryptocurrency exchange files for bankruptcy after second hack.

The South Korean exchange Youbit has been hacked for a second time this year, resulting in the loss of 17% of its total assets, leading to the announcement of a halt in trading in order to staunch losses.

A pop-up notice on the Youbit website said: “I am very sorry to inform you again with the sad news. After the accident in April, we have done our best to improve the security, recruitment and system maintenance, and have managed to lower the hot wallet rate. Then, at 4:35 am, we lost our coin purse due to hacking."

"We will close all trades, suspend all deposits or withdrawals and take steps for bankruptcy," the exchange said in a statement.

The exchange also said that customer’s assets would be marked down to 75% of their value, "In order to minimise the damage to our members, we will arrange for the withdrawal of approximately 75% of the balance at 4:00 am on 19 December. The rest of the unpaid portion will be paid after the final settlement is completed.

"We will do our best to minimise the [losses] of our members by 17%, through various methods such as cyber comprehensive insurance (3 billion) and selling the operating rights of the company," concluded the company

An official at Korea Internet and Security Agency (KISA) said the police were investigating the hack. The previous hack in April, when 4,000 bitcoins ($5m) were stolen was linked to North Korea.

Cryptocurrency exchanges are easy targets for hackers and as their popularity increases they become more vulnerable.

The potential bubble has heightened the concern of Seoul’s financial regulators, who during the previous week banned financial institutions from dealing in cryptocurrencies.

South Korea was one of the countries where the bitcoin fever was hitting the hardest, with the country accounting for 20% of all bitcoin transactions. Demand had been so strong that bitcoin prices there were noticeably higher than in other markets.