South Korea鈥檚 largest cryptocurrency exchange, Upbit, has committed to a temporary halt of deposit and withdrawal services after discovering unauthorized outflows totaling around $36 million from a hot wallet on the Solana network.
The exchange’s announcement comes shortly after its parent company, Dunamu, announced a significant $10 billion acquisition deal with fintech giant Naver, which has raised concerns regarding the security of digital assets. This incident, which occurred around 4:42 AM local time (7:42 PM UTC), led Upbit to perform a comprehensive security review across its platform.
It was confirmed that the breach was limited to the hot wallet, with cold wallet holdings remaining unaffected. Upbit has since transferred all remaining assets into cold storage and initiated attempts to freeze transactions.
This incident also invites comparisons to a previous attack in 2019, where Upbit lost nearly $50 million as a result of hacking activities linked to the North Korean group Lazarus.
In a recent tweet, Cointelegraph reported that “馃毃 ALERT: Upbit suspends deposits and withdrawals after $38.5M abnormal outflow on Solana network, reporting the assets were transferred to unknown wallet on Nov 27. Upbit confirms it will cover all losses.”
Assurance for Users
Upbit has reassured users that it will fully compensate for any losses incurred due to this vulnerability. They have indicated that while deposits and withdrawals will remain suspended throughout the security assessment, trading capabilities on the platform will proceed as usual, allowing users to engage with their assets.
Regulatory agencies are currently conducting inspections to gather further insights into the incident, although Upbit has not yet provided a specific timeline for when services will resume fully.
Security Concerns in the Crypto Industry
During a recent tech conference, Trezor CEO Matej Zak expressed concerns about the persistent vulnerability within crypto exchanges, stating: “Exchanges are obviously massive honeypots for hackers, and since security is a moving target, this problem is not going away.” He cited the significant increase in the volume of assets lost to hacks throughout the year.
The security breach for Upbit coincides with crucial developments for Dunamu, which is set to further expand its operations through the acquisition by Naver and a planned initial public offering in the US following the deal’s completion. Additionally, both companies are gearing up to invest nearly $7 billion within the next five years to create a robust ecosystem focusing on Web3 technologies and artificial intelligence.
