South Korea: Crypto Exchange UpBit Hacked; Reports $51 Million Ethereum (ETH) Withdrawal

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Major South Korean cryptocurrency exchange, UpBit, announced that over 340,000 worth of Ethereum (ETH) was transferred to an anonymous wallet. While the exchange did not explicitly mention a hack attack nor specify how the withdrawal was done, the company pledged to cover up the missing funds. 

UpBit Crypto Exchange Possibly Hacked for $51 Million

On November 27, 2019, UpBit released an official announcement via its website, stating that the platform noticed an abnormal withdrawal of 342,000 ETH ($51 million) from its hot wallet to an unknown wallet address. 

Whale Alert, a digital currency monitoring platform, initially mentioned the incident via Twitter:

Rumors started circulating on Twitter that the exchange platform had been hacked. The company did not explicitly confirm or deny the speculations per the announcement but stated that ETH was the only affected virtual currency at the moment. 

Following the incident, the exchange platform suspended withdrawal and deposits for two weeks while it conducts investigations into the cause of the irregular withdrawal. Furthermore, the company moved all digital currencies from hot wallet storage to the more secure cold wallet storage. 

Also, if the investigations reveal that funds were indeed lost, the company stated that it was going to cover up the lost funds from the platform’s account. UpBit, however, advised users not to deposit ETH until the issue is cleared. 

Back in May 2019, North Korean hackers targeted clients of Upbit to steal bitcoin (BTC) from them. The hackers impersonated the company’s admins to deceive customers into releasing more personal details. 

For now, it is unconfirmed whether the incident that occurred on the exchange platform was a hack or something else. However, observers and the crypto community, in general, await more information from the company that could probably explain how 342,000 ETH left the platform’s wallet.

South Korean Crypto Bourses Continue to Suffer

South Korean cryptocurrency exchanges seem to be the worst hit when it comes to hacking attacks, compared to their western counterparts. Some of these hacks resulted from a lack of proper security on the part of the exchange companies.

The UpBit incident looks like the Bithumb incident in April 2019 that was later confirmed to be a hack. Just like UpBit, South Korea’s largest cryptocurrency exchange, Bithumb, noticed an “abnormal withdrawal” from the platform’s hot wallets. However, the platform suspected the hack was an inside job, subsequently losing millions worth of crypto assets.  

Apart from the hacks, the regulatory framework for virtual currency exchanges in South Korea is stringent. The country’s regulatory watchdog, the Financial Services Commission (FSC) announced plans to oversee bitcoin exchanges operating in the country, a move that could cause further problems for exchanges.

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