Upbit Security Breach: South Korea’s leading cryptocurrency exchange, Upbit, has recently faced a significant security challenge. The exchange identified unauthorized outflows amounting to $36 million from a Solana-network hot wallet. This incident has led to the temporary suspension of deposits and withdrawals, stirring concerns within the crypto community.
The suspicious activity was detected at approximately 4:42 am local time (7:42 pm UTC), prompting Upbit to halt all transfer services. The exchange immediately initiated a comprehensive security review of its cryptocurrency assets to assess the impact of the breach.
Focus on Solana Hot Wallet
The breach was isolated to the Solana hot wallet, with Upbit confirming that cold-wallet reserves were unaffected. In response, the exchange swiftly transferred its remaining assets into cold storage and began on-chain freezing attempts to prevent further losses.
This incident has cast a shadow over Dunamu, Upbit’s parent company, which recently announced an acquisition deal worth $10.3 billion with the South Korean tech giant Naver. The breach echoes a similar security incident in 2019, when Upbit suffered a significant loss due to a hack attributed to the North Korean Lazarus Group.
Implications for Users
While trading on the platform remains operational, users are currently unable to move funds on or off the platform until the security review concludes. Upbit assured its customers that any lost balances will be reimbursed from its reserves, emphasizing that no customer assets will ultimately be lost due to the breach.
Customers are encouraged to remain patient while the exchange conducts a thorough audit and cooperates with regulators to finalize the investigation. Local financial authorities have also initiated on-site inspections to delve deeper into the incident.
Security Breach Amidst Expansion Plans
The Upbit security breach coincides with a significant milestone for its parent company, Dunamu. The recent $10.3 billion acquisition deal with Naver involves a stock-swap arrangement, making Dunamu a wholly-owned subsidiary of Naver.
Beyond the acquisition, Dunamu intends to launch an initial public offering (IPO) in the United States post-merger. Furthermore, Dunamu and Naver are planning a substantial investment of nearly $7 billion over five years to foster the development of Web3 technologies and artificial intelligence.
Despite the breach, Upbit has maintained its commitment to safeguarding user funds and ensuring a secure trading environment. While the exact timeline for reimbursing the affected funds remains undetermined, the exchange has expressed its dedication to resolving the issue promptly.
Cointelegraph reached out to Upbit and Dunamu for further comments, but no responses have been received at the time of publication.
