Categories: Cryptocurrency

Stolen funds from Upbit hack moved to unknown wallets

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Stolen funds from the Upbit Hack in November 2019 were reported to have been moved to unknown wallets.

A large-scale transfer of 2,000 ETH, worth US$406,469 [AU$621,987], was recently flagged by crypto transaction live tracker Whale Alert.

According to Whale Alert, the funds were transferred from the wallet used to store stolen funds from the Upbit Hack of 2019 to unknown wallets.

The Upbit Hack of 2019

Upbit, a crypto exchange platform based in South Korea, suffered from a hack that resulted in the loss of cryptocurrencies stored from its hot wallet back in 2019.

A total of 342,000 ETH, which was worth almost $50 million at that time, were transferred to different unknown wallet addresses.

Sok-Wu Lee, chief executive officer of Upbit, apologized for the situation and temporarily closed the exchange to lessen the damage. Upbit also covered the losses. The statement read:

“At approximately 1:06 p.m. on Nov. 27, 342,000 ethereum was sent from Upbit’s ethereum hot wallet to an anonymous wallet address — 0xa09871AEadF4994Ca12f5c0b6056BBd1d343c029 […] We took immediate action to protect your assets, and no investors’ assets were lost.”

What later ensued is a sell-off of cryptocurrency assets due to the fear that other hot wallets could fall victim from the same attack. The capitalization of all digital assets back then dropped to $191 billion.

This is not the first attempt at running away with the funds

The attempted transfers that have been flagged by Whale Alert today was not the first, however.

Several attempts have been tried before when the hackers tried to transfer them to exchanges like Binance and Huobi.

This prompted Binance’s cooperation in ensuring that these funds don’t make their way to the exchange. According to Binance, once they find that some of these funds are transferred to the exchange, they will be “immediately frozen.”

Upbit has worked on improving its security since then

Recent reports this year have revealed efforts from Upbit to ensure that they can provide a safer and more secure trading platform.

With this aim in mind, they extended their partnership with Chainalysis, a blockchain monitoring platform. They will continue utilizing Chainalysis’ Know-Your-Transaction (KYT) product to monitor real-time transactions and flag suspicious crypto activities as they happen.

According to Alex Kim, chief executive officer of Upbit Asia-Pacific (APAC) region, their partnership with Chainalysis will help them comply with upcoming regulations from authorities.

In a statement, Kim said:

“As more and more markets around the world adopt new regulations, it was vital for us to find a compliance partner that could work with us as we expand our digital asset business to new markets.”

Take-aways from the Upbit hack

A lot has been learned from the instances when centralized exchanges fell victim to hacking. And just in time for the BTC halving, it might be more important than ever to ensure the security of exchanges.

If BTC prices go up, and the security of the network loses out on the necessary adjustments pre-halving and during halving, it might not promise good news for crypto investors.

Images courtesy of ThisIsEngineering/Pexels, ThisIsEngineering/Pexels

Errol Villorente

Covering topics on technology, finance, and cryptocurrency. Believes in the promise that lies in the blockchain and cryptocurrency to change the international financial landscape.

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Errol Villorente

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