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- Upbit shifts nearly all customer assets to cold storage after a major hack of its hot wallet.
- Following a $30M hack, Upbit plans to reduce hot wallet exposure to nearly zero.
- South Korea is considering new crypto regulations to impose bank-level liability on exchanges.
South Korea’s largest cryptocurrency exchange, Upbit, is transferring nearly all of its customer assets into cold storage following a significant hack of its Solana hot wallet. This move represents one of the most drastic security measures taken by a major trading platform.
The operator, Dunamu, has said it will raise its cold wallet ratio to 99% and limit its hot wallet to almost zero after hackers stole 44.5 billion won ($30 million) in a wallet linked to it. This security makeover extends beyond what is required by the Virtual Asset User Protection Act of South Korea, which requires exchanges to keep at least 80% of the customer deposits offline.
Cold wallets keep the assets offline, which are difficult to hack but slow to transfer. Hot wallets are available to make deposits and withdrawals in real time. They are easy and more susceptible to attacks. A 99% cold wallet ensures that the trader has less money at risk in the event of another hot wallet breakdown.
In a statement on Wednesday, Dunamu disclosed that as of the end of October 2025, 98.33% of customer assets were in cold wallets and 1.67% in hot wallets in Upbit.
Upbit to Cut Hot Wallet Exposure to Zero After Security Update
Upbit had the lowest share of the hot wallet in domestic exchanges prior to the hack. With the competitors having ratios of cold wallets ranging between 82% and 90%, according to data made by lawmaker Heo Young.
The company announced that it maintained its cold wallet above 98% amid the increased crypto prices and flows created by new listings. The company has finally finished revising and updating its wallet infrastructure. As it intensifies its security, Upbit intends to bring out the ratio of its hot wallets to zero.
This follows a hack initially estimated at 54 billion won ($37 million) on the Solana blockchain. Which Upbit subsequently redefined at 44.5 billion won according to a subsequent internal review. In a breakdown, 38.6 billion won ($26.2 million) in direct user losses were experienced. Which Upbit has promised to repay in full using its funds.
Also Read: South Korea Cracks Down on Crypto Exchanges: New Laws Hold Platforms Liable for Hacks!
According to the exchange, the attack had an impact on tokens such as Solana (SOL), ORCA, RAY, and JUP. Upon notice of abnormal withdrawals, Upbit stopped operation, transferred the rest of the resources to cold storage. And initiated a forensic examination of its infrastructure and blockchain transactions.
South Korea Considers Stricter Regulations for Crypto Exchanges
The exchange used weak wallet software, which engineers discovered had a vulnerability that could have allowed attackers to infer the private keys by analyzing public blockchain data. Upbit, however, has not verified whether this particular flaw was used in the breach. The company’s response indicates that it views hot wallet exposure as a systemic risk that requires both reduction and fixation.
This accident is raising regulatory rethinking in the industry. The Financial Services Commission in South Korea is deliberating new regulations to put major crypto exchanges under bank-level liability requirements. Such as the need to compensate for hacks or crashes of their systems, even if not at fault.
These regulations would be the same as what binds banks and other electronic payment companies in South Korea through the electronic financial transactions law.
When these laws are implemented, exchanges conducted within Korea will require increased security protections and capital bases to absorb losses to make them more consistent with the expectations imposed on the traditional financial institutions.
The entire transfer from Upbit to cold storage almost entirely illustrates the extent to which a top platform is ready to go to convince consumers that their funds will not lie on the internet as an easy target.
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