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Stolen Ethereum from Upbit on the move: Inside job or security breach?

  • UPbit has offered an update on the theft of the 340.000 Ethereum from its exchange platform.
  • Members of the cryptocommunity have kept a close eye on developments and have traced the movements of the funds.

Yesterday, CNF has reported on the facts surrounding the hacker attack on the South Korean cryptocurrency exchange UPbit. The stolen funds amount to around 340,000 Ethers (ETH), a sum that reaches 50 million dollars. UPbit has confirmed the attack and, although no specific details are known about it, other exchanges claim to be taking steps to block any stolen money that enters their wallets.

On the other hand, UPbit has taken steps to try to contain the situation. It has frozen its clients’ funds, moved its funds from the hot wallet of the exchange to a cold wallet and suspended all withdrawals and deposits for two weeks. In addition, they have promised to reimburse the stolen Ethereum as soon as possible.

Destination of the Ethereum funds and theories about the hack

From the moment the theft was reported, the crypto community has speculated on how the events has occurred. Some claim that the hack was an inside job. This practice, it is presumed, could be used by exchanges to circumvent the payment of taxes.

However, the hacker’s modus operandi shows no evidence to support that argument. Nor has it been proven that the security of the platform has been compromised.

Representatives of the exchange have demanded not to spread false news, nor to reach conclusions before having all the information. At the moment, they are cooperating with the authorities so that the investigation ends satisfactorily.

As the Ethereum network is public, it has been determined that the funds have been moved. Twitter user Chiachih Wu has said that new addresses have been created since the attack and that the hacker could be trying to make a withdrawal through the Huobi platform.

httpss://twitter.com/chiachih_wu/status/1200356454831665159

In addition, other exchanges have taken the floor in connection with the attack. Binance CEO Chanpeng Zhao has stated that they are working with UPbit and other members of the crypto industry to prevent trades with the stolen Ethereum funds.

httpss://twitter.com/cz_binance/status/1199638755306397696

However, Zhao himself has said that this task is very difficult. The hacker might try to move the funds using other methods. For example, exchanging Ethereum for Bitcoin using swap tools.

Stricter regulations in Asia

Just this week, a change in regulations was announced in South Korea, UPbit’s home country. The new regulatory framework will require all entities that use cryptocurrencies to provide more information, permits and will generally have a stricter position to prevent money laundering through these means. On that line, China, has also been tightening up its regulations. The central bank of China announced that they will maintain a stricter control towards the exchanges of cryptocurrencies.

It remains to be seen what the fate of the stolen crypto exchange funds will be and how the investigation will end. For now, there are many open questions. Apart from that the price of Ethereum stands at $155 with a slight increase of 2.02% in the last 24 hours.

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About Author

Reynaldo

Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

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