Will Upbit Compensate its Traders or Will it Go Under?
Upbit isn't the best-known cryptocurrency exchange in the west. It launched in 2017, with the help of their partner Bittrex and focuses on the Korean market where it is one of the more popular exchanges. On Coinmarketcap, it is ranked #53 globally on adjusted volume.
Upbit was previously ranked as Korea's most transparent exchange and the 3rd most transparent globally by the Blockchain Transparency Institute. Unfortunately, bad things happen to even reputable and transparent exchanges.
Upbit Hacked 342,000 ETH Stolen
Earlier today some on Twitter have noticed strange transfers from Upbit's wallet. This was followed by a temporary pause on deposits & withdrawals, which further raised suspicions. These guesses were later confirmed by Upbit in an official announcement.
In the announcement Lee Seok-woo the CEO of Upbit promised to cover any client losses.
"At 1:06 PM on November 27, 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
As soon as we confirmed this, we started responding.
Upbeat responds as follows to protect members' assets.
To ensure that your assets are harmed, 342,000 ETH transferred to unknown wallets will be covered by upbit assets. We're working on it, and I'll tell you as soon as I'm done.
All cryptocurrencies in Hot Wallet have been transferred to Cold Wallet.
It is estimated that it will take at least two weeks for the deposit and withdrawal to resume. I'll tell you again when this is done.
Ethereum is the only trade out of the bulk transactions, and the rest of the bulk trades have moved all cryptocurrencies in Hot Wallet to Cold Wallet."
Upbit & Exchange Hacks
The magnitude of this hack is very large. A U.S. Dollar estimate would be roughly $192,550,160. If Upbit will cover trader's affected as promised, that is a big hit to take. Such a loss could even cause the end of operations for an exchange, as with Cryptopia.
On the bright side, the stolen coins will likely be flagged by nearly every exchange. Additionally since Upbit have promised to cover the loss, so hopefully this won't move the markets too much.
UPbit is not using the word "hack" for $51.3 million loss. At this point, considering the possibility of insider job.â Joseph Young (@iamjosephyoung) November 27, 2019
As with many exchange hacks, this could have been an inside job.
Written by Jonathan Ganor
Writer & cryptocurrency aficionado