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Upbit confirms $50M of Theft – 342k ETH loss

Wednesday was a sad day for the crypto exchange industry as one of the main Korean giants Upbit suffers a major loss of a total of 342,000 Ether from its wallet which is traced to go to a single wallet. According to Whale alert which is a transaction tracking site, the $50 million was stolen at about 4:00 UTC on Wednesday. In half an hour, all deposits and withdrawals were suspended temporarily.

The Hack

The loss was announced through an official statement by the CEO of Upbit’s operator Lee Seok-Woo on November 27th. According to the CEO, the exchange will be forced to liquidate its corporate assets to make up for the losses. He promised that the exchange will do all in its power to increase security. Currently, all the other assets that the exchange had in its hot wallet has been moved to cold storage.

All the normal operations have been paused as a precaution and it might take at least two weeks for everything to be back to normal. The CEO promised that all users will be informed when normal operations resume. Just to assure users, Lee Seok-woo indicated that from the incident, the only abnormal large-scale transfer they have had is transferring the assets from hot wallet to cold storage facilities. According to Whale Alert, there have been more than 10 transactions that have been done involving millions. Some of the money was sent to other blockchain addresses and some were transferred to Bittrex crypto exchange.

Hot signals

As from March, the company got signals of a tempted phishing scam with the hackers traced to be from North Korea. Upbit was able to get the signals with the help of local cybersecurity firm East Security.

As a security measure, the four major crypto exchanges collaborated in January 2018 to created a hotline for detecting and freezing any suspicious transactions.  The participating exchanges were Bithumb, Upbit, Coinone, and Korbit. Despite the security measure, it still does not guarantee that the exchanges will not have security breaches. So far, Bithumb and Upbit are the most affected with Bithumb having three breaches.

It is normal for exchanges to be hacked. Binance was also a victim earlier in the year where it lost up to $40 million of BTC when its hot wallet was accessed. Crypto exchanges are vulnerable and it can be internal or external. Internal maybe through employees who have access to the wallets and external may be through hackers who work hard day and night.

Photo by noodle kimm on Unsplash

Marcia

Marcia

Marcia is a real crypto fan, specialized in bitcoin and NFT news.

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