Crypto exchanges aren’t safe yet – Upbit mysteriously loses $50 million worth of ETH


The cryptocurrency industry has been plagued by hacks since the time when MtGox was the leading Bitcoin exchange. It was basically the first big hack that shook the entire market to its core, as $450 million worth of Bitcoin was lost which would be worth close to $8.5 billion at current Bitcoin prices.

In the first half of 2018 itself, the crypto industry had lost $1.1 billion in cryptocurrency in hacks and the number just keeps on rising.

2019 has seen its fair share of crypto exchanges falling prey to the hands of these hackers. The world’s number one crypto exchange by volume Binance was hacked earlier in 2019 where the hackers had managed to steal 7000 BTC from the exchange’s hot wallet.

In January, New – Zealand based crypto exchange Cryptopia was hacked for $2.44 million in Ether and around 48 million centrality (CENNZ) token which valued at $1.18 million. The exchange noted this as a “security incident”.

Later in May 2019, the largest South Korean exchange, Bithumb was hacked and $19 million USD was stolen. The hack was considered to be an inside job as the stolen assets were from the exchange’s reserve funds. These incidents were among the few popular ones that caught the eye.

Recently, another South Korean crypto exchange Upbit saw a suspicious transfer of 342,000 ETH ($50 million) from the exchange’s hot wallet to an unknown wallet at KST 1:06 pm (4:06 UTC). Soon after the move, the exchange announced that Upbit operator Lee Seok-woo has moved all the funds from the hot wallets to their cold wallets and trading has also been suspended and the services are expected to resume in two weeks.

This sudden suspension of trading was quiet suspicious as large Crypto transaction tacking bot “whale alert” had revealed a series of heavy transactions from Upbit. Right after the announcement from the exchange, media outlets started reporting this as a USD 79 million hack and the news spread like wildfire. The announcement, however, mentioned that only the Ether transfer is under question.

Joseph Young a crypto analyst says that the temporary suspension of deposits and withdrawals are not so uncommon, but Upbit supposedly makes an announcement before it moves its assets from hot wallets to Cold wallets, and this time there was no prior announcement before the move.

The news was first reported by Korean news outlet Naver, where it stated that crypto exchanges often move their assets from hot wallets to cold wallets from user protection. It further stated that an industry official has said: “There is a disagreement as to whether the exchange has been hacked or moved from the exchange side to the cold wallet.”

As of now Infringement response organization the Korea Internet Security Agency (KISA), is investigating the matter but no official news of a hack has surfaced. Amidst all the rumours and suspicions, Binance CEO Changpeng Zhao has pledged to help Upbit with a tweet stating:

Anna Larsen
Anna Larsen has been a Crypto enthusiast since 2016. Fascinated by the technology and its usecases she decided to pursue a career in content creation related to this space. The journey has been exciting ever since.

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