Dunamu, Upbit’s Parent Company, Faces Sanctions Over $30 Million Hack
South Korea’s Financial Supervisory Service (FSS) has started formal sanction procedures against Dunamu, the parent company of Upbit, nearly eight months after a major $30 million hack.
Details of the Upbit Hack
On November 27 last year, Upbit suffered a hack worth 44.5 billion won (approximately $30 million) in Solana-based assets. The attackers drained the funds over 54 minutes. Dunamu covered most affected customer assets using its own reserves and has frozen part of the stolen funds.
Current Sanction Process
The FSS recently sent an inspection report to Dunamu — the first official step in the sanction process. The regulator is examining possible violations of the Virtual Asset User Protection Act.
However, South Korea’s current crypto law lacks specific provisions for sanctioning exchanges over hacks or IT failures. This makes the final penalty unclear.
Dunamu’s Response and Criticism
Dunamu used its reserves to compensate users for 38.6 billion won ($26 million). The company has also frozen 2.6 billion won of the stolen funds and continues recovery efforts.
The exchange faced criticism for delaying the hack announcement until after a major merger event with Naver Financial.
Regulatory Outlook
Authorities plan to introduce stronger rules in the upcoming Digital Asset Basic Act. This new law will include specific sanctions and compensation requirements for hacking incidents.
The FSS has also completed an inspection of rival exchange Bithumb and will begin sanction procedures there soon.
