Posted on November 28, 2019 at 7:56 AM
Crypto wallet hacking has become something very common these days, as Upbit has become the latest victim. Earlier today, Upbit confirmed that there was a theft on its Ethereum crypto, and the hackers transferred about $49 million worth of ETH cryptocurrency from the company’s account to an unknown address.
There are still movements in the Upbit wallet, but Upbit has assured that the company is initiating such movements. It wants to transfer the remaining funds to a safer cold wallet.
Upbit is the 50th biggest cryptocurrency exchange in the world based on trading volume. The exchange offers over 200 crypto pairs in the market currently. It is the only major crypto exchange in South Korea without any incidence of the hack. It speaks volumes about the current security state of cryptocurrency in the industry.
However, the company has not yet confirmed how the hackers got through their system or whether it was an inside job.
The transaction from the Upbiit account to the unknown addresses was initially flagged off until Upbit has fully confirmed it. Just earlier today, the company confirmed that it was actually a theft from hackers.
Right now, Upbit has suspended any transactions coming into its account or going out until after two weeks. The CEO of the exchange, Lee Seok-woo, has apologized to investors, assuring them that their securities are intact. Upbit will now have to take care of the loss from its assets.
When Lee Seok-woo released the statement about the theft some hours ago, he didn’t mention specifically that the company had been hacked. Many have suggested that his choice of word “theft” suggests that he may be suspecting an insider job in this case. It could also mean that the stated $50 million worth of ETH had been misplaced and not retrievable at the moment.
Upbit had already assured investors that it would replace the $50 million worth of stolen funds, so investors should not worry about the safety of their equities. Also, the crypto exchanger revealed that it had transferred the remaining crypto funds in its possession to its safer cold wallet to protect its customers from further problems. The cold storage system is not connected to the internet, so it would be safe there until Upbit is completely secure for operations, according to the CEO.
Abnormal transactions raising questions
The frequency of attacks on cryptocurrency wallets suggests that it is not wise to keep a lot of crypto coins in hot storage. It will leave so many coins vulnerable to cyber attackers because the internet provides a better avenue for that. Currently, Upbit has not released any information concerning how the attack took place.
Some Reddit users have already begun to question the genuineness of the hack claim. According to them, this is not the first time a company has declared its cryptocurrency hacked only to carry out an exit scam. There have been previous exit scam cases, including LoopX, Benebit, and BitConnect. However, no evidence shows Upbit’s case was an exit scam or an inside job.
Prevalence of cryptocurrency theft
Theft in the cryptocurrency market has become so common that the news doesn’t surprise anyone anymore. Earlier in the year, hackers stole $4.2 million worth of cryptocurrency from Bitrue, $32 million worth from Bitpoint, and $32 million from Binance. There are many other incidents just this year alone.
CipherTrace, a cryptocurrency intelligence company, pointed out that exchanges and other stakeholders have lost close to $4.26 billion worth of crypto funds up until July. With the recent incidents from July to this point, the hacked amount has certainly increased.
Bitcoin loses momentum
As a result of the news, Bitcoin recorded a slight slip as it fell by $2 (close to 2%). It could even fall further if the negative sentiments in the market continue for long.
However, Bitcoin is not the only major cryptocurrency that has suffered a dip, possibly from the news. Ethereum had already gone down to 2.6% while other cryptocurrencies have equally dropped momentum within the last 24 hours after the news broke out, according to CoinMarketCap.