The South Korean UpBit crypto exchange has been hacked. The exchange itself announces this in a statement. An as yet unknown hacker has sent 342,000 ether to his own wallet, at a value of 48.7 million dollars (44.3 million euros).
UpBit stored ether in a hot wallet
The 342,000 ethers were stored in an UpBit hot wallet. A hot wallet is a cryptocurrency retention wallet that is constantly connected to the internet. Such wallets are therefore easier to hack than a cold wallet. These are wallets that do not have direct contact with the internet.
In the statement of UpBit, CEO Lee Seok-Woo says the following:
“At 1:06 pm on November 27, 2019, 342,000 ETH was transferred from the Upbeat Ethereum Hot Wallet to an unknown wallet. Unknown portfolio address is 0xa09871AEadF4994Ca12f5c0b6056BBd1d343c029. ”
The time that Seok-Woo mentions is the local time, in Dutch time the hack took place at 5:06 am. The statement came about five hours later. The hacker’s address also appears in the statement. And that is handy, because all transactions on the Ethereum network are public. The same applies to the hack that took place today.
The address of the hacker is now enabled on Etherscan as Upbit hacker 1. For the time being, the hacker makes no effort to channel the ethers, his stolen ethers are still on his address:
Affected users are reimbursed
Lee Seok-Woo further explains that UpBit immediately takes measures:
- All users are reimbursed from an UpBit insurance fund.
- Remaining crypto coins are sent from the hot wallet to a cold wallet
- It is not possible to deposit and withdraw on UpBit for two weeks
Lee Seok-Woo also says that other major transactions of the exchange are not suspicious. UpBit is currently moving crypto coins from hot wallets to cold wallets.
Prices react
A hack like this often has a direct influence on the price of cryptocurrencys. Immediately after the news, the price of various cryptos collapsed. Below you can see the price of bitcoin. The shock was good, in half an hour bitcoin fell by nearly two hundred euros:
Not your keys, not your coins
Storing your crypto coins on a crypto exchange always entails risks. You are not in charge of managing your private keys, access to your crypto coins. In that case you place the responsibility for managing your cryptocurrency at the exchange. And that is dangerous, because exchanges often manage millions of euros in crypto currency.
The safest way to store your cryptos is through a hardware wallet. This is a small device that serves as a cold wallet. Hardware wallets come in all shapes and sizes, and costs between 40 and 120 euros.
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