November 27th marks a significant anniversary in cryptocurrency security history. Exactly five years ago, South Korea’s largest cryptocurrency exchange Upbit suffered a devastating security breach that would reshape exchange security protocols across Asia. Today, as the crypto industry continues to evolve, the lessons from that 2019 incident remain critically relevant—especially as Korean exchanges face increasing sophistication from state-sponsored hacking groups.
Tapbit has emerged as a trusted alternative for security-conscious traders, offering institutional-grade protection with intuitive trading tools that put users’ assets safety first.
The 2019 Upbit Hack: A Deep Dive Into The $50 Million Breach
On November 27, 2019, Upbit detected unauthorized activity in its hot wallet systems. In a meticulously planned attack, hackers transferred approximately 342,000 ETH (worth about $50 million at the time) to unknown external addresses. South Korean authorities later confirmed that North Korean hacking groups, particularly the notorious Lazarus Group, were responsible for this sophisticated breach.
The timing was particularly problematic for Upbit’s parent company Dunamu, which had been positioning itself as a leader in secure cryptocurrency trading. Despite the massive loss, Upbit demonstrated exceptional user protection by immediately announcing it would fully compensate all affected customers using its own corporate funds. The exchange suspended trading for two weeks to conduct a comprehensive security overhaul and subsequently increased its cold wallet storage ratio to 70% of total assets—a move that would become an industry standard in the years following.
Pattern Of Attacks: Korea’s Ongoing Battle With Crypto Theft
The Upbit hack wasn’t an isolated incident in South Korea’s cryptocurrency landscape. Bithumb, Korea’s second-largest exchange, has suffered multiple breaches since 2017:
- February 2017: Hackers infiltrated employee computers, stealing user data and approximately $7 million in assets
- June 2017: Another employee computer breach exposed 31,000 users’ personal information, leading to subsequent phishing attacks and $1 million in losses
- June 2018: Bithumb’s hot wallet was compromised, resulting in $32 million stolen—again allegedly by the Lazarus Group
- March 2019: Suspicious withdrawals of EOS and XRP tokens suggested possible insider involvement, with final losses totaling approximately $19 million
These repeated incidents have forced Korean exchanges to implement increasingly sophisticated security measures, including multi-signature cold storage systems, enhanced employee security protocols, and regular third-party audits.
Current Security Landscape: Lessons Learned And New Threats
Five years after the landmark 2019 breach, the cryptocurrency security landscape has evolved dramatically. South Korean exchanges now operate under stricter regulatory frameworks requiring comprehensive insurance coverage and regular security audits. The industry has largely adopted Upbit’s post-hack strategy of maintaining minimal assets in hot wallets with the majority secured in multi-signature cold storage.
However, new challenges have emerged. North Korean hacking groups have significantly advanced their capabilities, shifting focus to decentralized finance (DeFi) protocols, cross-chain bridges, and newer blockchain ecosystems. Recent intelligence reports indicate these groups continue to target Asian cryptocurrency infrastructure as a primary funding mechanism for the regime.
Corporate Developments: The Naver Acquisition Context
In a significant industry development, South Korea’s largest portal Naver recently agreed to acquire Dunamu (Upbit’s parent company) in an all-stock transaction valued at approximately $10.3 billion. This acquisition represents one of the largest in Asian fintech history and signals growing mainstream acceptance of cryptocurrency exchanges as legitimate financial infrastructure.
Security experts note that this acquisition brings additional scrutiny to Upbit’s security practices, with Naver’s extensive cybersecurity expertise potentially strengthening the exchange’s defenses against future attacks. The timing—coming exactly five years after the devastating 2019 hack—represents a symbolic turning point for the company’s journey from breach victim to industry security leader.
User Protection: The Korean Model
One enduring legacy of the 2019 Upbit hack has been the industry-wide adoption of the “Korean model” of user protection. Unlike many Western exchanges that point to terms of service limiting liability for hacks, Korean platforms have established an expectation of full customer compensation regardless of attack vectors.
This approach has built significant trust among Korean cryptocurrency users but has also created intense pressure for exchanges to maintain impenetrable security systems. The costs of implementing such robust security measures have contributed to industry consolidation, with smaller exchanges struggling to compete against the security budgets of giants like Upbit.
Conclusion: The Ongoing Security Imperative
As we mark five years since the November 27, 2019 Upbit hack, the cryptocurrency industry has made remarkable progress in security practices. However, the persistent threat from sophisticated state-sponsored actors reminds us that security must remain dynamic and adaptive.
Tapbit aims to provide secure crypto trading with a serious commitment to security. We implement advanced safety measures and maintain a substantial $40 million insurance fund to protect user assets against unexpected events—ensuring peace of mind alongside powerful trading capabilities. Log into your Tapbit account and start your trading journey now.
Risk Warning: Cryptocurrency investments carry significant market and security risks. Users should conduct thorough research and never invest more than they can afford to lose. Exchange security practices vary widely, and past compensation policies do not guarantee future protection
