S. Korea-Based CEX Suspends Withdrawals, Deposits Following $13 Million Hack

GDAC, a South Korea-based cryptocurrency exchange, halted withdrawals and deposits in its platform and is unsure when the services would resume after it lost around $13 million in crypto due to a hack that took place over the weekend.

The assets the exchange lost include nearly 61 Bitcoin (BTC), 350.5 Ethereum (ETH), 10 million WEMIX, and 220,000 USDT, which is equivalent to 23% of the total assets the platform manages, according to an official statement issued by the company earlier this week.

The exchange temporarily paused deposit and withdrawal services on the platform to perform emergency server maintenance.

"We ask those in charge of exchanges handling virtual assets to immediately block the deposit from the address where the withdrawal occurred, as stated in the official notice," GDAC said.

The incident which occurred Sunday drained the exchange of millions of dollars worth of crypto after malicious actors targeted the exchange's hot wallet.

It is worth noting that cryptocurrency exchange platforms use hot wallets to keep a portion of funds available for fast trading and withdrawal activities.

However, unlike cold wallets that keep assets offline, hot wallets carry with them security risks since they are linked to the internet, which means when a crypto company's hot wallets are compromised, its losses could cascade not only to the company but also to its clients and customers.

The crypto company is currently working with multiple institutions and authorities to recover the lost funds and has also suspended its wallet system and related servers after reporting the incident to the Korean Internet Promotion Agency (KISA) and the FIU, with the exchange's CEO Seunghwan Han assuring its customers that it is doing its "best by collaborating with various organizations" to monitor and recover stolen funds.

Unfortunately, the crypto exchange could not yet tell when it can resume services on its platform because of an ongoing investigation.

"We ask for your understanding that it is difficult to confirm the resumption point of deposit and withdrawal as the investigation is currently underway," GDAC said.

Over the past 18 months, cryptocurrency platforms have been threatened by hacks and exploits perpetrated by malicious actors. Authorities believe that most of them are hackers from the Democratic People's Republic of Korea (DPRK) who use stolen crypto to allegedly fund the country's nuclear weapon initiatives.

One of the largest and most notable hacks linked to the DPRK is the "Axie Infinity" Ronin bridge hack, which lost $625 million last year.

Just this Sunday, Sushi, a decentralized finance (DeFi) protocol, was exploited for $3.3 million.