- Binance froze 17% of Upbit’s stolen funds after investigation.
- Delays in asset freezing spark concerns over exchange response times.
- Global mechanism for asset freezes remains a challenge in crypto.
South Korean authorities are grappling with the aftermath of a significant hacking incident involving Upbit, one of the country’s largest crypto exchanges. According to KBS, investigators reached out to Binance for assistance in freezing funds linked to the breach.
The funds in question were Solana (SOL) tokens worth about 470 million Korean won ($370,000), which were allegedly tied to the November 27 hack of Upbit. However, Binance only froze a portion of the requested amount—around $55,000 or roughly 17%—after a 15-hour delay.
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Concerns Over Exchange Response Times and Legal Risks
Reports suggest that Binance cited the need for further verification before taking action. This has raised concerns about the speed of response from major centralized exchanges when foreign law enforcement agencies request freezes on potentially stolen assets. According to experts, rapid action is crucial in mitigating the damage caused by such incidents.
Cho Jae Woo, director of Hansung University’s Blockchain Research Institute, emphasized that quick freezes are vital to limit the impact of hacks. He also noted that exchanges often use litigation risks as a reason to delay these requests, suggesting the need for a more streamlined global process.
Binance Denies Claims, Stands by Actions
Despite the delays, Binance later issued a statement rejecting KBS’s claims, asserting that it had acted swiftly and effectively in response to the incident. A Binance spokesperson clarified that the exchange’s security and investigations teams were prompt in freezing related transfers to prevent further movements of the stolen funds.
Authorities, including local law enforcement, are continuing to investigate the hack. Upbit has yet to provide an official comment on the incident. However, a spokesperson confirmed that the exchange is actively working with law enforcement to track down the perpetrators and recover the stolen assets. They also stated that they had reached out to global exchanges, requesting them to freeze any related funds.
While Binance denied any wrongdoing, the incident highlights the ongoing challenges that exchanges face in balancing the need for swift action against concerns about legal liabilities. The lack of a unified global mechanism for freezing assets quickly continues to pose significant obstacles in addressing cybercrime in the crypto space.
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