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South Korean-based Cryptocurrency Exchange Enters Hack List, Loses $50m in Ether

On Nov. 27, Naver, South Korea’s most popular news site, reported a suspicious activity happening at UPbit. According to the news outlet, a significant amount of Ethereum was transferred out of the exchange before it announced a temporary suspension of cryptocurrency deposits and withdrawals.

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UPbit, one of the largest cryptocurrency exchanges based in South Korea, confirmed that it was hacked after rumors were mounting. In a statement, the platform announced that all trading activities, deposits, and withdrawals were temporarily suspended until further notice.

It lost nearly $50 million worth of ether (ETH) cryptocurrency.

Before releasing the hack details, UPbit suspended cryptocurrency deposits and withdrawals due to service checks. In the updated announcement, the exchange said it will take “at least two weeks” for deposit and withdrawal services to resume.

Naver affirmed that the way services were suspended led them to believe that UPbit was hacked since the exchange usually notifies its users before any bulk transfer of cryptocurrencies are made.

Raising the alarm of the hack was Whale Alert, a Twitter service that monitors blockchain transactions, did mention: “342,000 #ETH (49,848,273 USD) transferred from #Upbit to unknown wallet.” The massive withdrawal alerts did raise suspicions, with several people on social media calling it a hack.

Whale Alert, in fact, noted several withdrawals taking place via UPbit, involving other cryptocurrencies and tokens as well – Tron (TRX) and BitTorrent (BTT), among others. But the exchange said only ether holdings were affected.

Following numerous reports about the number one South Korean cryptocurrency exchange being hacked, Lee Seok-woo, the CEO of Dunamu, which is the firm behind UPbit, released an official statement. Lee confirmed that 342,000 ETH were transferred from the exchange’s hot wallet to an unknown wallet.

The Hacking Streak

Earlier this month, Vietnam-based little-known crypto exchange VinDAX got hacked and lost at least $500,000 worth of cryptocurrencies. In July, Japanese crypto exchange Bitpoint got breached and lost about $32 million in cryptocurrencies, including XRP. A month prior to that, Singapore-based crypto exchange Bitrue suffered a hack, losing about $4.3 million in XRP and Cardano (ADA) tokens. Other exchanges include Binance, Bithumb, DragonEX and Cryptopia.

Binance Pledges Support

The CEO of the world’s largest cryptocurrency exchange by trading volume, Changpeng “CZ” Zhao took to twitter to pledge his support and warn off detractors:

We will work with Upbit and other industry players to ensure any hacked funds that may make their way to Binance are immediately frozen. Stay #SAFU
Although UPbit’s announcement came after several users reported the incident, Lee apologized to all customers for any “inconvenience” caused. He also promised to cover all the losses with corporate assets and ensured that deposits and withdrawals would resume in the next couple of weeks.

One of the most recent hacks in the digital currency space, the attack on South Korea’s Bithumb exchange, saw thieves nab $30 million in stolen digital tokens. This was one of the largest thefts of its kind this year, but it is far from the only one.

Indeed, even as cryptocurrencies have proliferated widely and as security systems designed to protect customers and exchanges have grown more sophisticated, hacks and instances of theft have also continued to take place. When the attack involves a service as large as Bithumb, South Korea’s biggest cryptocurrency exchange, it shows that even the largest players in the digital currency world are not necessarily safe.

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Crypto Stats

CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin57,631 0.53 % 1.42 % 2.02 %
Ethereum2,047.1 1.02 % 1.62 % 6.85 %
Binance Coin413.01 1.65 % 7.36 % 36.42 %
Tether1.000 0.11 % 0.12 % 0.12 %
Polkadot43.88 0.58 % 0.43 % 36.39 %
Cardano1.210 0.51 % 0.88 % 1.84 %
XRP0.9653 0.50 % 0.65 % 68.22 %
Uniswap29.74 0.62 % 2.58 % 6.04 %
Litecoin224.10 0.26 % 0.22 % 14.05 %
Chainlink32.17 0.84 % 0.37 % 10.20 %