The vulnerability of cryptocurrency exchanges has once again been brought to the forefront as UPbit, a prominent South Korean exchange, revealed that it experienced a staggering 159,061 hacking attempts during the first half of this year. This data, shared by the exchange’s operator, Dunamu, with South Korean politician Rep. Park Seong-jung, highlights the escalating risks faced by these platforms. The number of hacking attempts on UPbit has surged by a startling 1,800% over the past three years, skyrocketing from 8,356 attempts in the latter half of 2020 to more than 159,000 in the first half of this year.
The recent hack on the HTX exchange, which resulted in a loss of approximately $8 million in Ethereum (ETH), further emphasizes the vulnerability of cryptocurrency exchanges. UPbit, being one of the largest South Korean crypto platforms, has become a prime target for hackers. In August alone, the exchange accounted for 6% of the total trading volumes across centralized exchanges, outperforming major rivals such as Coinbase and OKX.
In response to the growing threat landscape, UPbit is taking proactive measures to fortify its security infrastructure. The exchange’s plan includes increasing its cold wallet holdings to 70%. Cold wallets are renowned for their resistance against hacking attempts as they provide enhanced protection against cyber threats. By implementing this strategy, UPbit aims to safeguard its assets, acknowledging the historical vulnerability of hot wallets to hacking incidents.
In addition to bolstering cold wallets, UPbit is introducing new security protocols for its hot wallet funds. These hot wallets will operate within a multi-layer security structure, adding an extra layer of protection to these assets. Moreover, the exchange has deployed an artificial intelligence-backed Fraud Detection System (FDS) to prevent financial fraud. This advanced system will assist in identifying and mitigating potential threats.
Rep. Park Seong-jung has raised concerns regarding the increasing frequency of cyber attacks on cryptocurrency platforms and the unclear role of the government in managing such incidents. To better understand the evolving information security landscape and ensure the protection of sensitive data, Seong-jung has called for the Ministry to conduct white mock hacking tests. These tests will assess the information security preparedness of businesses, including virtual asset exchanges that handle personal information.
The surge in hacking attempts on UPbit is a clear indication of the growing threat faced by cryptocurrency exchanges. The vulnerability of these platforms requires urgent attention and proactive measures to strengthen their security infrastructure. By increasing the use of cold wallets, implementing new security protocols, and deploying advanced systems like the Fraud Detection System, UPbit is taking significant steps towards protecting its assets. Furthermore, the government’s involvement in managing cyber attacks on cryptocurrency platforms needs to be defined clearly to ensure the safety of users’ information. It is crucial for virtual asset exchanges to prioritize information security and regularly assess their preparedness to combat evolving cyber threats.