Lazarus Group Suspected in Upbit Hack

On Thursday, Upbit announced the detection of abnormal withdrawals involving Solana-based crypto assets, prompting an immediate suspension of deposit and withdrawal services. Initial reports indicated a loss of roughly 54 billion won ($36.8 million), but this was later revised to approximately 44.5 billion won ($30.4 million).

Authorities, citing anonymous government and industry sources, are increasingly confident that the Lazarus Group was behind this security breach. The methods employed in this attack bear a striking resemblance to the techniques used in a previous 2019 theft, which further raises suspicions about Lazarus’ involvement.

Attack Methods and Investigation

Unlike direct server attacks, the hackers are believed to have compromised administrator accounts or impersonated administrators to authorize the fraudulent transfers. This sophisticated approach has complicated the investigation, but authorities are preparing an on-site inspection of Upbit to gather further evidence.

Blockchain analysis provider Dethective has revealed that onchain data shows a wallet associated with the hack swapping Solana for USDC and bridging funds to Ethereum. This movement of funds is being closely monitored as the investigation continues.

Historical Context and Implications

The Lazarus Group’s previous involvement in a 342,000 ETH hack from Upbit in November 2019 adds a historical context to their alleged participation in this recent breach. South Korean police have concluded that Lazarus was indeed responsible for that attack, intensifying scrutiny on their operations.

This incident underscores the persistent threat posed by organized cybercrime groups in the cryptocurrency space. It highlights the urgent need for enhanced security measures and robust regulatory frameworks to protect digital assets and investor confidence.

Corporate Developments and Future Outlook

Amidst these security challenges, Naver Financial has confirmed its merger with Dunamu, the company behind Upbit. This strategic move aims to secure future growth momentum based on digital assets. As a wholly-owned subsidiary, Dunamu will integrate with Naver Financial to bolster its digital infrastructure and security protocols.

As the investigation unfolds, the cryptocurrency community remains vigilant, understanding the critical importance of securing exchanges against such formidable adversaries as the Lazarus Group.

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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.

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This Ether, which was in possession of Chairman Myung-hwan, was donated during a March campaign that encouraged Upbit users to contribute cryptocurrency to assist underprivileged children who struggle to afford school essentials such as uniforms and bags.

During a meeting on May 20, South Korea’s Financial Services Commission (FSC) modified its regulations to permit nonprofits and virtual asset exchanges to trade cryptocurrencies under new compliance standards.

According to a CoinGecko report in April, Upbit, the nation’s leading exchange by trading volume, experienced a 34% decrease in volumes, falling from $561.9 billion in Q4 2024 to $371 billion in Q1 2025, as part of a wider market downturn.

Effective from June 1, nonprofits in South Korea are now able to liquidate cryptocurrency donations. In addition, exchanges can now liquidate user fees paid in crypto, provided real-name accounts are used and other Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations are adhered to.

Nonprofits must present at least five years of audited fiscal history to accept and liquidate cryptocurrency donations. On the other hand, exchanges are limited to selling cryptocurrency only to cover operational costs, subject to daily limits.

The FSC plans to further liberalize the regulations later this year, allowing publicly listed firms and entities registered as professional investors to buy and sell cryptocurrency.

It is estimated that about one-third of South Korea’s population, or over 16 million investors, have cryptocurrency accounts. Additionally, public officials in South Korea have disclosed their participation in crypto investment. The country’s Ethics Commission for Government Officials revealed on March 27 that 20% of surveyed public officials hold 14.4 billion won ($9.8 million) in crypto, representing 411 of the 2,047 officials subject to the country’s crypto asset disclosure requirements.

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The Impact of South Korea on XRP Prices

According to XForceGlobal, South Korea is significantly influencing XRP’s price dynamics. The analyst unveiled on X (previously Twitter), that the keen engagement and adoption of crypto by South Korean users play a fundamental role in XRP’s bullish standing.

South Korea is a leading player in global crypto trading, with high trading volumes across various assets. However, XRP stands out conspicuously within the active South Korean market. The analyst disclosed that even on slow trading days, XRP regularly outperforms Bitcoin, highlighting its demand and adoption in South Korea.

XForceGlobal believes that South Korea’s interest in XRP is likely due to its unique position in crypto regulations. As one of the most isolated countries in crypto regulations, a significant number of citizens (about 20% of the cryptocurrency’s market cap valuation) own the altcoin.

With a shortage of extensive cross-border payment solutions, many South Koreans prefer cryptocurrencies like XRP for transactions. This preference boosts adoption, strengthens XRP’s utility, and subsequently, positively impacts its price.

XRP’s Future in South Korea

XForceGlobal also shed light on XRP’s future in South Korea. The market is at a crucial juncture where XRP has transcended from being a speculative asset to representing Korea’s dominance in the crypto market.

Currently, Upbit, South Korea’s largest crypto exchange, holds the most substantial market share of XRP in terms of total supply. The exchange reportedly possesses about 6 billion XRP, which accounts for approximately 5% of the total supply.

The analyst suggested that the ongoing demand from retail investors, coupled with Upbit’s vast XRP reserve, will cement South Korea’s role in shaping the cryptocurrency’s global price action in the future.

Furthermore, the analyst discussed XRP’s price movements on the Korean won chart, suggesting that its current action might be a precursor to future trends. He highlighted that the altcoin has already formed a lower low on the chart, hinting at a more tempered pullback rather than a sudden decline — a perspective he described as “arguably bearish”.

The crypto analyst also believes that XRP might be shaping a potential bottom on the Korean won chart, indicating a possible surge to the upside and a bullish continuation.

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