Upbit hack ends in nearly $50M crypto loss for exchange

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South Korean cryptocurrency exchange Upbit notified its users of the unauthorized transfer of 342,000 Ether (ETH) from its hot wallet. The breach was confirmed in an official statement from Lee Seok-woo, CEO of Upbit, while explaining the reason for the unscheduled suspension of crypto-asset deposit and withdrawal.

In his statement on Upbit’s website, Lee revealed that: “At 1:06 PM on November 27th, 2019, 342,000 ETH (approximately 58 billion won) were transferred from the Upbeat Ethereum Hot Wallet to an unknown wallet. Unknown wallet address is 0xa09871AEadF4994Ca12f5c0b6056BBd1d343c029. We took immediate actions to protect your assets, and no investors’ assets were lost.”

Apologizing to investors for any inconvenience caused, the CEO outlined steps taken by the exchange after it detected the incident. Lee stopped short of calling the intrusion a hack and instead referred to the situation as an abnormal transaction on its wallets.

Actions include: Suspensions of all crypto-asset deposits and withdrawals; Transfer of all crypto-assets to cold wallets. (Please note that all large-scale asset transfers following the ETH transfer were part of this process.)

The exchange has promised to protect user assets, asserting that corporate assets will immediately cover the 342,000 ETH (roughly $49 million at press time). Deposits and withdrawals will resume in approximately two weeks, with Lee promising to update users with any further developments.

Lee ended the post by calling on the crypto community to support blocking deposits from the anonymous address 0xa09871AEadF4994Ca12f5c0b6056BBd1d343c029. Also, Lee asked users with information on this address to contact Upbit’s hotline.

Binance CEO Changpeng Zhao tweeted that the exchange will “work with Upbit and other industry players to ensure any hacked funds that may make their way to Binance are immediately frozen.”

Upbit is operated by South Korean Fintech firm Dunamu, a subsidiary of Korean tech giant Kakao. Over $100 million worth of multiple cryptocurrencies has been sent out from Upbit today. Lee confirmed all other transactions, apart from the abnormal Ethereum outflow, was the exchange transferring cryptos from hot wallets to cold wallets to prevent further losses.