Upbit halts transfers after $36M Solana hot wallet breach
South Korea’s largest cryptocurrency exchange, Upbit, temporarily halted deposits and withdrawals on Thursday after detecting approximately $36 million in unauthorized transfers from a Solana-network hot wallet. The exchange said the unusual activity was identified at around 4:42 am local time (7:42 pm UTC), prompting an immediate suspension of transfer services and a comprehensive security review of all supported assets.
Upbit stated that the incident was confined to its hot wallet, with cold-wallet reserves unaffected. The exchange moved remaining funds to cold storage and initiated on-chain efforts to freeze the transferred assets.
The breach coincided with developments at parent company Dunamu, which announced a multibillion-dollar transaction with Naver earlier this week, and follows a 2019 security incident at Upbit that resulted in losses of nearly $50 million, previously attributed to the Lazarus Group.
Upbit says customer balances will be reimbursed
As a precaution, Upbit suspended deposits and withdrawals across the platform, not only for Solana-based assets. The freeze will remain in effect until the exchange completes its security assessment.
Trading services continue to operate, allowing users to buy and sell within the platform. Transfers on and off the exchange are paused while the review is underway.
Upbit said any balances affected by the incident will be fully covered by its reserves, and no customer action is required to recover funds. The exchange asked users for patience as it conducts a platform-wide audit and coordinates with regulators. Local reports indicate financial authorities have begun on-site inspections. Upbit has not provided a timeline for the resumption of transfer services.
Incident coincides with Dunamu’s expansion plans
According to a Wednesday filing, Naver Financial agreed to acquire Upbit operator Dunamu in a stock-swap transaction valued at 15.1 trillion won (about $10.3 billion). Under the terms, Naver will issue 87.5 million new shares to Dunamu shareholders, after which Dunamu will become a wholly owned subsidiary.
Following the merger’s completion, Dunamu plans to pursue an initial public offering in the United States.
Naver and Dunamu also plan to invest nearly $7 billion over the next five years to build an ecosystem for Web3 technologies and artificial intelligence.
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