SENNA

Upbit Hit with $36M Solana Breach Day After $10B Naver Deal

SEOUL - South Korea's largest cryptocurrency exchange Upbit has been hit by a $36 million security breach on its Solana network hot wallet, just a day after its parent company announced a landmark $10 billion acquisition deal.

The incident raises fresh concerns about the security of crypto platforms, coming on the heels of FTX's high-profile collapse. It also puts a spotlight on Upbit's corporate parent Dunamu, which had touted the Naver deal as a major strategic move to expand its fintech footprint.

Upbit said it detected the unauthorized outflows of roughly $36 million in crypto assets from its Solana hot wallet early on Thursday local time. The exchange quickly suspended all deposits and withdrawals across its platform as it investigates the breach and moves remaining assets into more secure cold storage.

"We are currently tracing the path of the withdrawn cryptocurrency and will take all possible measures to get it back," Upbit said in a statement. The company assured users that its cold wallet reserves were unaffected and that it would fully cover any lost customer funds.

The breach comes just over three years after Upbit lost nearly $50 million in a 2019 attack attributed to the North Korean Lazarus hacking group. That incident had forced the exchange to temporarily halt services while it bolstered its security protocols.

Industry experts say the latest breach underscores the persistent cybersecurity risks facing crypto platforms, which manage vast troves of digital assets. "Hot wallets connected to the internet are inherently more vulnerable to hacks compared to air-gapped cold wallets," noted Matej Michalko, CEO of crypto security firm Trezor.

The timing of the incident is particularly sensitive for Upbit's parent Dunamu. Just a day earlier, the fintech firm had announced plans to acquire internet giant Naver's financial services unit in a 12.5 trillion won ($10 billion) deal - one of the largest transactions in Korean fintech history.

Analysts say the Naver tie-up was seen as a major strategic move by Dunamu to diversify beyond its core crypto exchange business and build a broader financial services platform. But the Upbit breach threatens to overshadow that expansion plan, at least in the short term.

"This latest incident will certainly raise questions about Dunamu's operational capabilities and risk management, just as it seeks to take the company to the next level," said Sung Han-na, a senior analyst at Korea Investment & Securities. "Upbit will need to act quickly to reassure investors and customers that it has the security controls in place to protect their assets."