South Korean Crypto Exchange Loses $49 Million Worth of Ethereum

UPbit said it has enough money to refund lost ether. Cryptocurrency exchange UPbit out of South Korea disclosed this week that it lost $49 million of Ethereum.

In a blog post, UPbit said that on 27 November at 1:06 P.M. 342,000 ETH valued at about 58 billion won or $49 million, was transferred from the Upbeat Ethereum Hot Wallet to an unknown wallet.

Cryptocurrency losses a thing in 2019

"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," wrote UPbit in the post. "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."

UPbit isn't the only big cryptocurrency exchange to suffer a theft. So far this year $42 million was stolen from Binance while Bithumb lost $19 million and a Bitpoint theft resulted in $28 million in cryptocurrency being heisted.

When these thefts happen, many turn to social media to speculate as to the cause. Finger-pointing tends to land on the exchanges themselves, with some speculating the operators of the exchanges take the money and run. That was the case with UPbit, at least among some users on Twitter.

The "hacker" timed when UPbit was making crypto transfers to its cold wallet (other alts like TRON, etc.)

Hence, I think the probability of it being an inside job is higher than external breach.

UPbit Says it has enough to cover losses

At least one expert, Taylor Monahan, founder and CEO of MyCrytpo looked into the incident and told Cointelegraph that while anything is possible people are jumping to conclusions by saying its an inside job.

“The biggest thing that points to it not being an inside job is how the transactions were generated and signed. UPbit seems to follow a certain method with their programmatic transactions, and the ‘hack’ transaction in question used a different method. In addition, UPbit manually signed a transaction to secure their remaining ETH, after discovering the hack, and this too was generated differently than the ‘hack’ transaction,” Monahan said in the report.

UPbit's Chief Executive Lee Sirgoo said in the report the exchange has enough funds to reimburse the lost amount and that the refunds should happen shortly.

Credit: Donna Fuscaldo