Binance's Response to Upbit Hack Raises Concerns About Freezing Protocols
The investigation into the Upbit hack has highlighted Binance's limited response in freezing requested funds, prompting a discussion on the need for improvements in emergency asset freezing protocols among major exchanges.
Binance has reportedly acted on only a fraction of the funds associated with the hack of Upbit, a leading crypto exchange in South Korea. The exchange halted approximately 17% of the total funds linked to the incident following a request from police.
According to KBS, authorities had asked Binance to freeze 470 million Korean won ($370,000) in Solana (SOL) tokens thought to be related to the breach that occurred on November 27. Binance only managed to block around $55,000 after a significant delay of 15 hours, citing the need for further verification.
This incident raised concerns about how effectively major exchanges comply with requests from international law enforcement agencies regarding the freezing of assets suspected of being involved in criminal activity.
The Importance of Immediate Action
Cho Jae-woo, the Director of the Blockchain Research Institute at Hansung University, highlighted the critical nature of swift action in minimizing damages in hacking incidents. He criticized exchanges for often citing litigation risks as a rationale for reluctance to cooperate and proposed creating a global hotline for exchanges to coordinate emergency freezes more effectively.
The Upbit hack led to unauthorized withdrawals of Solana assets worth around $36 million, igniting an official police investigation and initiatives by Upbit to trace and recoup the stolen funds across different platforms.
An Upbit representative stated that while they could not disclose specific details regarding the KBS report, they confirmed that local law enforcement is actively working to identify the perpetrators of the attack.
“Upbit is working closely with the authorities, and we have additionally asked major global exchanges to freeze any assets detected from the related wallets.”
A spokesperson from Binance also provided a statement, affirming their adherence to policy that prohibits commenting on specific cases, yet underscoring their readiness to cooperate with relevant authorities.
Binance handles law enforcement requests exclusively via an official channel and collaborates globally to assist in investigations concerning illicit activities. They also indicated that Upbit would reveal further updates as they become available.
