South Korea’s largest cryptocurrency exchange, Upbit, has been hit by a significant security breach resulting in the theft of approximately $37 million in digital assets, occurring as it progresses with a high-profile merger with tech conglomerate Naver.
The incident involved the unauthorized withdrawal of various Solana-based tokens, leading Upbit to temporarily suspend all deposits and withdrawals as it investigates the breach. The exchange detected the anomaly around 4:42 a.m. Korea Standard Time (KST) on November 27.
Upbit has assured its customers that they will not incur any personal losses, stating it will use its reserve assets to compensate for all damages. The company has moved all remaining assets into secure cold wallets to prevent further compromise.
“We guarantee that customers will not suffer any personal loss; we will compensate for damages with our reserve assets,” an Upbit spokesperson announced following the discovery.
The stolen funds, valued at approximately $37 million, included a range of tokens native to the Solana blockchain, such as SOL, BONK, JTO, JUP, LAYER, PYTH, RENDER, TRUMP, and USDC. These assets were transferred to an unregistered external wallet.
In a proactive move, Upbit has successfully frozen $8.18 million worth of LAYER tokens and is collaborating with the affected token projects and South Korean authorities to recover the remaining stolen funds.
This security lapse comes at a critical juncture for Upbit, which is in the midst of a significant merger with Naver, a dominant information technology conglomerate in South Korea with a market capitalization of $284 billion. Naver is acquiring Dunamu, Upbit’s parent company, through a stock exchange agreement.
The merger aims to integrate Upbit’s cryptocurrency ecosystem with Naver’s expansive digital platforms, including its search engine and messaging services. The timing of the hack raises questions about the robustness of the platform’s security ahead of this major industry consolidation.
Upbit, regulated by the Financial Services Commission of South Korea, has not yet disclosed specific details regarding the method of intrusion or the entry point of the attack, indicating the investigation is in its early stages. Analysts suggest the event could cause temporary volatility in the Solana market, though the overall impact is expected to be contained due to Upbit’s swift response.
The exchange has pledged to provide regular updates to its users regarding the investigation’s progress through its official communication channels.