Thousands of Ethereum (ETH) Lost…
It’s another grim day for cryptocurrency exchanges, as South Korean exchange Upbit has announced that it has suffered a loss of 342,000 ETH, which is worth approximately $50 million at the time of writing!
“At 1:06 PM on November 27, 2019, 342,000 ETH (approximately 58 billion won) were transferred from the Upbeat Ethereum Hot Wallet to an unknown wallet. Unknown wallet address is 0xa09871AEadF4994Ca12f5c0b6056BBd1d343c029.” – Upbit theft announcement (translated)
Upbit also declared in its announcement that it will fully cover users’ stolen funds. It’s a costly lesson for the exchange and its users and serves as a bitter reminder of the risks involved with cryptocurrencies.
This event follows the data breach of BitMEX earlier this month and countless well-known exchanges suffering large losses, including Binance, Cryptopia, and Gatehub, to name a few.
Not Your Keys, Not Your Coins!
The thief has since drained the unknown wallet account of 0xa09871AEadF4994Ca12f5c0b6056BBd1d343c029. According to analysts following the trail of the stolen funds, some of the stolen ETH have been sent to other cryptocurrency exchanges and ETH wallet addresses.
Triggering suspicion within the diligent crypto community, large amounts of other cryptocurrencies, including EOS, XLM, and TRON, were also moved at a similar time. Upbit explained that this was actually the exchange itself moving funds from its hot wallets to its cold wallets as a safety precaution.
UPbit is not using the word "hack" for $51.3 million loss. At this point, considering the possibility of insider job.
— Joseph Young (@iamjosephyoung) November 27, 2019
Users can also expect an estimated two-week waiting period before deposits and withdrawals are reinstated, but this incident is still unfolding and this could change.
“It is estimated that it will take at least two weeks for the deposit and withdrawal to resume. Ethereum is the only (unathoruised) trade out of the bulk transactions, and the rest of the bulk trades have moved all cryptocurrencies in Hot Wallet to Cold Wallet.” – Upbit theft announcement (translated)
The unfortunate incident comes weeks before the Proof-of-Keys event, a community-wide run on the exchanges encouraging holders of ALL cryptocurrencies to take measures to store their coins independently and outside of exchanges.
This celebration of financial independence was suggested last year by Bitcoin investor Trace Mayer. It proved to be a huge success and went VIRAL on social media!
This post is for educational purposes. All information used is referenced accordingly. This is not investment advice; please always do thorough research and only invest what you are willing to lose, especially in times of uncertainty.