An incident occurred at Upbit, South Korea's largest cryptocurrency exchange, in which approximately JPY 4.8 billion worth of assets were illegally stolen from a hot wallet. As the market matures, the continued emergence of these "classic risks" symbolizes the difficulty of holding cryptocurrencies on an ongoing basis. While convenient, hot wallets also have vulnerabilities, and investors face potential risks associated with exchange dependency. We also explore how individuals can protect their assets.
The incident was confirmed around 4:00 AM on the 27th. It was discovered that 24 cryptocurrencies, primarily Solana (SOL), had been transferred from Upbit's hot wallet to an external address unrelated to the exchange.
After detecting the anomaly, Upbit immediately suspended all deposits and withdrawals and transferred all assets other than those in the affected hot wallet to a secure cold wallet. The stolen tokens included Solana cryptocurrencies such as SOL, USDC, JUP, RAY, and RENDER, as well as meme coins like TRUMP. Some tokens have been successfully frozen on-chain.
In a statement, the company's representative said, "Our top priority is protecting customer assets," and indicated that the company plans to compensate for the full amount of the damage using its own funds. The company's swift response and information updates, including the revision of the leaked amount from the initial announcement of approximately 54 billion won to 44.5 billion won, are commendable.
The company also explained that only the hot wallet was breached, and that the security of the cold wallet was not compromised.