An electronic board shows the exchange rate between the South Korean Won and Bitcoin at a cryptocurrency exchange in Seoul last December. Photo: Reuters/ Kim Hong-Ji

A flash crash wiped more than $15 billion from cryptocurrency markets in less than four hours at the weekend, initially in response to the hacking of South Korean trading exchange Coinrail.

All major crypto-currencies fell on Sunday morning, American time, with Bitcoin losing $500 in just over an hour. It dropped 10% during the weekend and now hovers around the $6,700 mark, which is its lowest price since early April.

Coinrail confirmed that it had a “cyber intrusion” on Sunday, which led to the exchange losing about $40 million. The Korea Herald said a criminal investigation has already begun into the hack, and that Coinrail lost more than 30% of its total coin and token reserves.

The newspaper said the exchange’s servers are now secure, but Coinrail had felt the need to request technical support from the state-run Korea Internet & Security Agency.

Korea remains a hugely influential large-volume crypto exchange market, but has experienced multiple hacking attempts in the past few years, with many Seoul law enforcement agents saying North Korea is to blame.

Other commentators have said there were external reasons for the weekend’s rapid sell-off, including regulatory crackdowns, led by multiple Washington federal agencies, into cryptocurrency price manipulation and the legitimacy of ICO fundraising practises. However, some within the cryptocurrency community are arguing that the fall was predictable and was just another price correction.

Asia-based crypto commentator Martin Young, writing on news site newsbtc, argued that the Coinrail hack was not hugely significant globally, as the exchange is currently ranked only 90th by volume. Instead, Young says “what we have seen time and time again is that when key support levels are broken, markets fall fast”.

He believes crypto news has “been positive over the past week or so”, and the crash “is just another example of this volatility that crypto traders have now become accustomed to”.

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