- The exchange reported unauthorised withdrawals.
- Solana-based cryptocurrencies removed from Upbit’s coffers.
- Upbit’s parent company is set to be acquired by internet giant Naver.
The ink was barely dry on Naver Financial’s $10 billion takeover of Dunamu, operator of South Korea’s largest crypto exchange Upbit, when the platform was hacked for $36 million.
Upbit confirmed the incident on Thursday and said it suffered an unauthorised withdrawal of Solana-based cryptocurrencies, including stablecoins, from its coffers.
“To prevent any damage to member assets, the entire amount will be covered by Upbit’s holdings,” Oh Kyung-seok, CEO of Dunamu, said in a statement.
Upbit has also paused deposits and withdrawals and frozen $8.2 million in Solaire, one of the tokens syphoned during the breach.
$10 billion acquisition
The hack lands at a singularly awkward moment for Upbit and its new owner-to-be.
Naver Financial, a subsidiary of Korean internet giant Naver, agreed to a $10.3 billion stock-swap deal to acquire all of Dunamu’s equity, according to regulatory filings.
Stock-swap deals allow companies to merge without the acquirer needing to pay cash. Instead, it issues its own shares to the other company’s shareholders. Naver is issuing 2.54 of its own shares per Dumanu share.
The merger is expected to catapult Naver’s fintech arm to a market value of $13.6 billion.
Record-breaking hacks
The breach at Upbit is also the latest entry in what has already become a record-setting year for losses from crypto hacks and exploits, as attackers continue to target exchanges and DeFi protocols.
Losses from these incidents have exceeded $2.4 billion, including the massive $1.5 billion hack of the Bybit crypto exchange that happened in February.
Even long-standing DeFi protocols like Balancer, which have undergone numerous security audits from several blockchain security firms, haven’t been spared.
In November, an attacker syphoned $128 million from Balancer.
Upbit isn’t a first-time victim.
In 2019, suspected North Korean hackers stole $42 million in Ethereum from the crypto exchange.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com.
