During the first half of 2023, South Korean cryptocurrency exchange Upbit faced an astounding 159,000 hacking attempts, as reported by its operating firm, Dunamu. This figure represents a significant surge compared to previous periods, marking a 117% increase from the first half of 2022 and a staggering 1800% increase from the same period in 2020.
Upbit is a major player in South Korea’s cryptocurrency exchange landscape, boasting a 24-hour trading volume of approximately $1.2 billion, as per CoinGecko. Other prominent exchanges in the country include Bithumb, Coinone, and Gopax.
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To combat the escalating number of security breaches, Upbit took proactive measures to enhance its security posture. Specifically, the exchange increased the percentage of funds stored in cold wallets to 70%, fortifying security significantly. Additionally, Upbit bolstered its security protocols for funds stored in hot wallets. Hot wallets are more susceptible to hacking because they store private keys online, in contrast to cold wallets, which store private keys on external hardware devices like hard drives and USBs.
Notably, Upbit had previously experienced a security breach in 2019, resulting in a $50 million exploit. However, the exchange reported that it had successfully prevented any subsequent cyber breaches since implementing various preventive measures.
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Nevertheless, Upbit encountered a setback in late September when it temporarily halted Aptos token services. The suspension was prompted by the platform’s inability to detect a counterfeit token called “ClaimAPTGift.com,” which managed to infiltrate 400,000 Aptos wallets.
Acknowledging the surge in cryptocurrency hacks, South Korean Representative Park Seong-jung of the People Power Party called on the South Korean government to take more decisive action. Seong-jung emphasized the need for large-scale mock tests and comprehensive investigations into information security conditions, especially in the context of frequent hacking attempts on virtual asset exchanges.
Seong-jung pointed out that the Ministry of Science and Technology should play a more assertive role in overseeing and managing cryptocurrency exchanges, as there appears to be ambiguity in its responsibilities in this regard.
Despite our attempts to seek comments from Upbit, we did not receive an immediate response. It is worth noting that cryptocurrency exchanges have been under attack in various incidents throughout September. For instance, Hong Kong-based exchange CoinEx suffered a $70 million hack due to the compromise of one of the firm’s private keys. CoinEx pledged to compensate affected users for any losses incurred.
In a separate incident, Huobi Global’s HTX exchange experienced a $7.9 million exploit on September 24th, highlighting the persistent challenges and threats faced by the cryptocurrency industry in maintaining robust security measures.
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