Crypto Exchange Upbit Faces $36M Hack on Solana, Commits to Customer Reimbursements

South Korea’s largest cryptocurrency exchange, Upbit, has reported a hack totaling approximately 54 billion won, or around $36 million, affecting the Solana network. The exchange has promised to fully reimburse its users after a significant amount of tokens was transferred to an unknown wallet. CEO Oh Kyung-seok emphasized the quick response to protect user assets and prevent further losses.

Key Takeaways

Upbit was hacked for about $36 million on the Solana network.
The exchange will reimburse all affected customers using its own assets.
Security measures have been enhanced, and deposit/withdrawal services are currently under review.
Upbit is in the process of cooperating with investigators regarding the incident.
This situation occurs as Upbit approaches a potential Nasdaq listing following a major deal with Naver.

Upbit

Upbit Reports Significant Hack on Solana Network

In a concerning development, Upbit, South Korea’s leading cryptocurrency exchange, has revealed that it was hacked, resulting in a theft valued at approximately 54 billion won, or about $36 million, from the Solana network. The attack, which occurred early Thursday, has prompted the exchange to assure its customers that they will be fully reimbursed for their losses.

Oh Kyung-seok, the CEO of Dunamu, the company that operates Upbit, indicated that the platform acted swiftly to stop transactions once unusual withdrawal activity was identified.

“Upbit quickly suspended all deposit and withdrawal services while carrying out a thorough examination to prioritize the protection of our members’ assets,” he explained in a notice directed at users.

Interestingly, this incident occurred almost six years after a previous hack on the same date in 2019, when Upbit lost approximately 342,000 ETH, estimated at the time to be worth about $41.5 million. That breach was later linked to North Korean hackers, and the stolen Ether is now valued at over $1 billion, making it one of the largest crypto thefts associated with North Korea.

Details of the Breach on Solana Tokens

On November 27, at roughly 4:42 AM, Upbit confirmed that several assets from the Solana ecosystem—which included SOL, USDC, and various smaller tokens—were withdrawn and funneled into an unidentified external wallet. Upbit classified this occurrence as “abnormal withdrawal activity” related to the Solana network.

The exchange has since determined the full magnitude of the outflow and has committed to absorbing the financial loss through its own assets. “We immediately assessed the digital asset outflow from the abnormal withdrawals and will cover the entire amount using Upbit’s resources to ensure no impact on our members’ assets,” Oh stated.

Following the breach, Upbit promptly secured its infrastructure. All assets were transferred to cold wallets to prevent any further unauthorized transfers, and an emergency security assessment was initiated for the affected network and wallet systems.

Resuming Deposit and Withdrawal Services

Upbit has also launched on-chain response measures, indicating its efforts to freeze the compromised funds wherever possible. So far, approximately 12 billion won worth of Solana tokens have been successfully frozen. The exchange is actively tracking the remaining assets and coordinating with the relevant projects and institutions to implement additional freezes.

As the situation develops, it is anticipated that regulators and law enforcement will become involved. Upbit is preparing to cooperate with investigative authorities in its attempts to freeze and retrieve funds related to the incident.

Simultaneously, the security assessment may extend beyond the Solana network. Upbit stated it is conducting a thorough review of the stability and security of its entire digital asset deposit and withdrawal system, with plans to gradually resume these services once it is satisfied with security improvements.

Throughout its communication, Upbit reiterated that customer balances would remain unaffected. “To prevent any harm to member assets, the total amount will be covered by Upbit’s holdings. We want to emphasize that this incident will not impact our members' assets,” the exchange asserted.

Finally, Upbit encouraged users to report any suspicious or verifiable information related to the withdrawals to its customer service team and apologized for any inconvenience caused.

Upbit’s Strategic Growth Amid Market Challenges

This attack occurs at a pivotal time for Upbit, as the exchange is on the brink of a potential Nasdaq listing. Reports suggest that Korean internet giant Naver is preparing to acquire Upbit’s parent company, Dunamu, in a multibillion-dollar stock swap merger. This deal, which was expected to be presented to the boards of both companies on November 26, could lead to one of the largest corporate consolidations in Asia’s digital finance sector and significantly influence Upbit's trajectory towards becoming a public entity.