Digital Currency Hackers Move Upbit Funds, Test Exchanges

  • Upbit confirmed yesterday that 342,000 ETH had been siphoned off the platform by digital criminals.
  • Hackers have stolen cryptocurrencies worth about $4.4 billion so far this year.
  • There is speculation that the heist was an inside job

Hackers that stole $51 million in Ethereum from Upbit are starting to move funds from their primary wallet. The coins are now being distributed to different wallets and in smaller sums of between 10 ETH and 100,000 ETH. The cybercriminals are also sending small amounts of crypto to some exchanges such as Huobi and Binance to test whether the funds will be accepted.

Ethereum is an open source, public, blockchain-based distributed computing platform and operating system featuring smart contract (scripting) functionality. It supports a modified version of Nakamoto consensus via transaction-based state transitions.

Upbit confirmed yesterday that 342,000 ETH had been siphoned off the platform by digital criminals, but said that there was no cause for alarm as the funds will be refunded. The value of the stash at the time of the theft was about $49 million, but an uptrend in Ether prices puts their current value at approximately $52 million.

Deposits and withdraws on the platform are currently disabled and will remain as such for the next two weeks as investigations resume. Binance CEO, Changpeng Zhao, has already pledged to freeze all funds that end up on his exchange. He has announced that his firm will work together with industry stakeholders to ensure that the coins are recovered.

Crypto exchanges, as well as enthusiasts, are keeping an eye on the stolen cryptocurrencies. Some users are also sending small amounts of crypto the wallets in a bid to monitor the trail. Such distributed dusting attempts make the funds harder to launder.

A Spike in Crypto Thefts

Hackers have stolen cryptocurrencies worth about $4.4 billion so far this year. This is according to the latest Ciphertrace report. The figure is more than double the funds stolen last year. Approximately $1.7 billion in crypto was looted in 2018. The trend indicates that digital criminals are getting better at scoring big heists. A vast proportion of the $4.4 billion sum is attributed to the PlusToken Ponzi scheme, which led to the loss of funds valued at about $2.9 billion.

Additionally, about $192 million got lost after QuadrigaCX exchange CEO passed away with the company’s private keys. It is worth noting that most crypto heists took place during the first six months of the year. Hackers stole about $4.2 billion in digital currencies during this time. The amount of funds stolen between the months of July and September is, however, the lowest recorded in the past two years.

Upbit is a South Korean cryptocurrency exchange. Upbit ranked third globally and first in Korea in the April Market Surveillance Report published by the Blockchain Transparency Institute (BTI) on April 12, 2019.

An Inside Job?

There is a fair amount speculation pointing to the Upbit heist as a probable inside job. Crypto analyst Joseph Young has proclaimed that it was most likely so because the breach took place at the exact moment when the firm was transferring large amounts of crypto to its cold wallet. This reduces external attack probabilities. The hackers must have known when the transfer was going to take place. The limited amount of information surrounding the incidence also seems to support the hypothesis.

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Sam Spencer

Sam Spencer is a Technology, Entertainment, and Political News writer at Communal News.

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