Major South Korean cryptocurrency exchange — run by a subsidiary of Korean tech giant Kakao — has notified users of the theft of 342,000 Ether (ETH) from its hot wallet.

The incident was confirmed in an official statement written by Lee Seok-woo, the CEO of Upbit’s operator, Dunamu, on Nov. 27.

Upbit will use corporate funds to protect user assets

In his statement, Lee Seok-woo revealed that:

“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.”

Apologizing to users for any “inconvenience” caused, the CEO outlined measures by the exchange taken after it detected the incident while stopping short of calling it a “hack.”

The exchange has pledged to protect user assets, stating that the 342,000 ETH (roughly $50 million by press time) will be covered by corporate assets. It has already moved all crypto assets held in its hot wallet to cold storage.

Deposits and withdrawals will take at least two weeks to resume, with Lee Seok-woo promising to inform users as soon as they reopen.

The CEO further indicated that all other recent large-scale transfers were not abnormal, but were related to the exchange moving assets between hot and storage facilities.

Active threats

In March of this year, Upbit and local cybersecurity firm East Security alleged that a phishing scam targeting its users had been perpetrated by hackers from North Korea.

In January 2018, South Korea’s four largest crypto exchanges — Bithumb, Upbit, Coinone and Korbit — created a hotline for major exchanges to ensure suspicious transactions could be detected and frozen immediately after being disclosed.

Bithumb has to date suffered three major security breaches, most recently in March of this year.