The crypto industry continues to innovate, but it remains susceptible to security risks. This concern was highlighted on Thursday when Upbit, South Korea's largest cryptocurrency exchange, announced a significant breach in its Solana network wallet, resulting in millions of dollars being transferred to an external wallet without authorization.
In brief
- •Upbit reported a major Solana wallet breach, initially estimated at 54 billion won, later confirmed at 44.5 billion won, equivalent to $30.5 million, moved without authorization.
- •Deposits and withdrawals were immediately paused as the exchange conducted a full review of the outflow.
- •Upbit pledged to cover all losses from its own resources to ensure users are not affected.
Scale and Source of the Breach
Upbit clarified in a revised notice that the withdrawal, initially estimated at 54 billion won, or approximately $37 million, was later confirmed at 44.5 billion won, roughly $30.5 million. This adjustment was made after reviewing the value of the assets at the precise moment the transfer occurred.
The exchange stated that the breach affected one of its hot wallets, while its cold wallet remained secure. The irregular activity was detected at 4:42 a.m. KST. This incident marks Upbit's second major security event since the 2019 Ethereum theft, which involved approximately $50 million. Upon detecting the unusual movement of funds, the exchange promptly suspended deposits and withdrawals and initiated a comprehensive review to determine the total extent of the outflow.
Upbit Moves to Secure Funds and Restore Safety
To safeguard user assets, Upbit implemented several immediate measures:
- •The exchange committed to covering the entire amount of the stolen funds using its own resources, ensuring that customers would not incur any financial losses.
- •All remaining assets were transferred to cold storage to prevent any further unauthorized outflows and to strengthen overall security.
- •On-chain freezing measures were activated. The company is collaborating with relevant projects and authorities to restrict the affected tokens. Approximately 2.3 billion won worth of Solaire has already been frozen, and efforts are underway to track and freeze other assets.
- •A complete security audit of the deposit and withdrawal systems is in progress. Services will be gradually reinstated once the security of the systems is confirmed.
Oh Kyung-seok, CEO of Dunamu, the parent company of Upbit, issued an apology for the disruption and reassured users that their assets were safe. He noted that the breach involved multiple tokens within the Solana ecosystem, including Solana, Jupiter, Solaire, Magic Eden, Official Trump, USDC, and others.
Crypto Activity Shifts Amid Upbit Breach and Dunamu Deal
Following the breach and the subsequent pause in withdrawals, Ki Young Ju, founder and CEO of CryptoQuant, observed that some traders began purchasing alternative tokens. He also noted that arbitrage bots remained inactive, capitalizing on the temporary market pause.
In separate news, Naver Financial, the financial division of Naver, has agreed to acquire Dunamu in an all-stock transaction valued at 15.13 trillion won, approximately $10.27 billion. The company stated that this acquisition is intended to enhance its position in digital assets and support its long-term growth objectives.