Binance Responds to Allegations of Delayed Action in Upbit Hack Incident

Binance Responds to Allegations of Delayed Action in Upbit Hack Incident

Summary:
Binance has rebutted claims that it took too long to react to the Upbit hack by asserting it acted promptly to freeze relevant funds and continues to cooperate with authorities.

Key Takeaways:

Binance denies allegations of inadequate or delayed responses in freezing the funds associated with the Upbit hacking incident.
The cryptocurrency exchange insists it responded immediately and has maintained collaboration with law enforcement throughout the process.
South Korean authorities assert that only a small percentage of the illicitly obtained assets were frozen, as hackers quickly laundered the stolen funds.

In a statement provided to Cryptonews, a representative from Binance stated that any insinuation of a delay or limited response is misleading.

"Binance’s security and investigations teams promptly identified the incident and took swift action to assist in freezing related transactions and preventing further movements," the spokesperson clarified.

Binance’s Prompt Actions and Collaboration with Law Enforcement

The exchange emphasized that it has been closely cooperating with law enforcement and other relevant entities since the incident occurred.

"We are actively monitoring the situation and offering support where necessary," the spokesperson highlighted, adding that allegations claiming Binance did not respond promptly or effectively are "unfounded and incorrect."

These statements were made following a report from South Korean investigators who indicated that Binance had only frozen a small part of the assets stolen during the Upbit hack.

Local media reports reveal that approximately 17% of the flagged assets were effectively secured.

Investigation teams mentioned that the attackers quickly moved the stolen assets, spreading them across over a thousand wallets within hours after the breach on November 27.

Security experts noted that the hackers employed strategies like chain hopping, token swaps, and bridges to hide their transaction footprints, complicating recovery efforts.

Authorities also reported that a substantial portion of the laundered funds eventually ended up in service wallets on Binance.

Upbit and the police reportedly requested an immediate freeze on around 470 million won (around $370,000) worth of Solana tokens believed to have been transferred to the exchange.

However, of that requested amount, only approximately 80 million won (around $75,000) was frozen, with Binance mentioning the necessity for further verification prior to broader action, as clarified by South Korean authorities.

Upbit’s Strategic Move to Enhanced Security After $30M Hack

In response to the incident, Upbit has decided to transfer nearly all customer assets into cold storage following the theft of 44.5 billion won (about $30 million) from its Solana hot wallet, signifying a robust security initiative from a leading exchange.

The exchange operator, Dunamu, announced it would increase its cold wallet holdings to 99% and minimize hot wallet exposure to nearly zero, significantly surpassing South Korea's legal requirement of 80% of user funds being stored offline.

As of the end of October, Upbit already had 98.33% of its assets in cold storage, the highest percentage among domestic platforms, but has expedited its security enhancements in light of the breach.

Meanwhile, South Korean authorities have initiated an investigation, with local reports suggesting early intelligence links the breach to North Korea’s Lazarus Group.