South Korea’s largest cryptocurrency trading platform – Upbit – is moving most of its users’ assets to cold storage after its hot wallet on the Solana blockchain was hacked. The move represents one of the most significant security measures taken by a major trading platform.
Operator Dunamu said it would increase the percentage of users’ balances stored in cold wallets to 99% and reduce the share of hot wallets to virtually 0%, after hackers stole 44.5 billion won (equivalent to $30 million) from an online wallet.
The change means Upbit exceeds South Korea’s legal requirements under the Virtual Asset User Protection Act, which requires trading platforms to store at least 80% of balances offline.
Upbit Reduces Use of Hot Wallets After Security Review
Cold wallets store assets offline, making them harder to hack and slowing transaction processing, while hot wallets stay connected to the network to directly process deposits and withdrawals, making them more convenient for users, but also more vulnerable to hacking.
South Korea’s largest cryptocurrency exchange, Upbit, announced that it will increase the proportion of user assets stored in cold (offline) wallets to 99%, reducing the proportion of hot wallets to 0%, following the theft of 44.5 billion KRW from its hot wallet by hackers. The wallet system…
-Wu Blockchain (@WuBlockchain) December 10, 2025
Upbit’s reliance on a 99% cold storage rate means that the amount of balances at risk will be very limited if hot wallets are hacked again. Operator Dunamu said in a press release on Wednesday that Upbit stores 98.33% of its users’ balances in cold wallets and 1.67% in hot wallets until the end of October 2025.
Before the hack, this appeared to be the lowest percentage of hot wallets among local exchanges, compared to competitors that maintain cold storage rates between 82% and 90%, according to data shared by lawmaker Heo Young.
Upbit explained that it maintains the share of cold wallets above 98% despite the rise in prices of digital currencies and increased balance movements thanks to the new listings. It also conducted a security review and restructuring of its wallets, and plans to reduce the percentage of hot wallets to zero while strengthening its security measures.
Hack targets Solana blockchain assets, forcing emergency security response
The move came after a hack of the Solana blockchain was initially estimated to cost 54 billion won (about $36 million), but Upbit later shared a more precise estimate of 44.5 billion won after conducting an internal review. The detailed report said users suffered direct losses of 38.6 billion won ($26.2 million) and the company pledged to compensate them entirely from its own reserves.
The currencies affected by the hack included Solana-SOL, Raydium-RAY, Jupiter-JUP and Orca-ORCA, according to Upbit’s statement. The platform’s activities were shut down as soon as the unusual withdrawals were detected, then the remaining assets were transferred to cold storage and an internal criminal investigation was opened to examine its systems and the movement of balances on the blockchain.
The proposed standards require compensation for losses by intrusion, regardless of the defect
Engineers discovered a weakness in the platform’s wallet programming; It is suspected that this is the input used by hackers to infer private keys by analyzing public blockchain data, but the platform has not confirmed that this particular vulnerability was exploited in the hacking process, and the company’s response reflects that hot wallets themselves are treated as a structural risk that needs to be reduced, not just addressed.
The incident has necessitated a reconsideration of industry regulation, as South Korea’s Financial Services Commission studies a set of new rules following the Upbit hack incident. These rules impose bank-level accountability standards on major cryptocurrency trading platforms, including mandatory compensation for those affected by hacking and system failure, regardless of the cause, in a manner that mimics the obligations of banks and electronic payment companies under the country’s Electronic Financial Transactions Act.
If these rules take shape, crypto trading platforms operating in South Korea will need a stronger security structure and larger financial reserves to absorb losses, bringing them in line with the expectations and reliability of traditional financial institutions.
So, Upbit’s near-complete shift toward cold storage shows how a leading platform is willing to take unprecedented steps to ensure its users’ assets are protected from direct exposure online.
The post Upbit platform moves most of its users’ balances to cold storage after hot wallet hack worth $30 million appeared first on Cryptonews Arabic.
