December 2, 2019 – Another major exchange has been breached—the seventh time this year.
Upbit, a subsidiary of Kakao (a South Korean internet company), announced last November 27 that 342,000 ETH was stolen from its hot wallet. The amount is worth approximately 50 million USD or 58 billion KRW (Won).
Fortunately, the loss will be covered by Upbit’s corporate assets to protect its users.
The exchange has transferred its entire funds to a cold wallet in order to ensure its safety in the event of another penetration attempt.
The stolen ETH was sent to an unknown wallet at first, then transferred and split between four different addresses. The hacker is likely searching for ways to cash out.
Deposits and withdrawals from the exchange are currently on hold for approximately another two weeks.
Apparently, this isn’t the first hacking incident. Cryptopia, DragonEx, Bithumb, Binance, BiTrue, and Bitpoint are major exchanges that have been penetrated in 2019 alone.
So what can we learn from all this?
Keep your funds in your wallet
A famous quote by Andreas Antonopoulos states “not your keys, not your bitcoin”. It’s ridiculous how this statement only resonates with the community every time an exchange gets hacked or huge sums of crypto assets are stolen.
Individuals who want to protect their investments should take the necessary precautions by keeping their crypto assets in a wallet that they control. Be sure to back up your wallet with a seed phrase and memorize it.
Your seed phrase will come in handy in extreme situations where you can no longer access your wallet.
Another reason not to keep all your funds in an exchange is that exchanges are prime targets for cybercriminals. One could say that crypto markets are currently one of the hottest bug bounties in the world, due to the amount of assets they keep in hot wallets.
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It’s no surprise that hackers are always on the prowl, in search of vulnerabilities. These days they are becoming more and more sophisticated, that no exchange is ever safe.
Investors ought to consider storing their digital assets in cold wallets—wallets that are not connected to the internet.
Cold storage is exponentially more secure than hot storage, therefore, it is recommended that you store the bulk of your funds this way. You may opt to keep some of your digital currencies in exchanges for trading purposes, as long as it’s not all of them.
Hardware Wallets like Trezor and Ledger are the best options for maximum security. Although they come with a high price, they are worth every penny, especially if your holdings are above $400.
Another option is to use a bootable USB wallet, which functions almost similarly, and is a lot cheaper. However, it is a bit technical to set up.
The digital assets market may be bountiful, but it also filled with unforeseen dangers. We can guarantee that Upbit won’t be the last major crypto exchange hack, so better prepare yourself. Do not become their next victim.
And never forget, NOT YOUR KEYS, NOT YOUR BITCOIN.
This article is published on BitPinas: Upbit Exchange Gets Hacked | Reminder to Protect Your Crypto