Upbit Loses $38.5M in Sudden Solana Outflow, Withdrawals Frozen

Upbit says customers won’t bear losses after a $38.5 million Solana outflow, pledging to cover the damage from its own reserves.

South Korean crypto exchange Upbit has temporarily halted all deposits and withdrawals on November 27 after detecting an unauthorized transfer of assets.

The incident, which resulted in a loss of approximately $38.5 million, involved a wide array of tokens on the Solana blockchain.

Upbit Freezes Solana-Linked Withdrawals

In a notice published early today, Dunamu CEO Oh Kyung-seok, who operates Upbit, confirmed that “abnormal withdrawals” occurred around 04:42 KST on the Solana network.

The outflow involved a basket of Solana ecosystem tokens, including SOL, USDC, BONK, JUP, RAY, PYTH, ORCA, and several smaller assets such as Double Zero (2Z), Access Protocol (ACS), Magic Eden (ME), and others tied to the Solana network.

The event was also flagged by several blockchain security firms, including PeckShield, which, a few moments before Upbit’s detailed statement, took to X, saying that the exchange’s wallets “were compromised,” with around $36 million in Solana-based assets leaving for an unknown address.

Following the incident, Upbit informed users that it had immediately suspended all deposits and withdrawals and moved remaining funds linked to the affected assets into secure cold wallets. The exchange reported that about 12 billion won worth of Solaire (LAYER) tokens have already been frozen on-chain, with efforts going on with project teams and institutions to lock down more of the stolen tokens.

It stressed that customers will not bear losses from the incident, saying it had “internally identified the extent of the loss” and pledged to cover the full amount from its own holdings. The company also repeated that user balances “will not be affected.”

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Meanwhile, a broader security review of the firm’s deposit and withdrawal systems, beyond just the Solana network, is underway, with services to be restored gradually once checks are complete.

A Persistent Industry-Wide Problem

The Upbit incident has once again brought to light the persistent security challenges facing digital asset exchanges. It is a continuation of a troubling yearly pattern. According to a previous report from PeckShield, there were around 20 major exploits in September alone, with about $127 million lost. While it represented a 22% drop from the $163 million stolen in August, it was still a heavy hit for users and projects.

Some of the biggest incidents included UXLINK’s $44 million exploit, where attackers manipulated a multi-signature wallet and later flooded the market with newly minted tokens, and SwissBorg’s $41.5 million loss tied to a compromised Solana staking provider.

One of the more recent occurrences involved the OG DeFi platform Balancer, which, on November 3, lost more than $128 million in assorted cryptocurrencies to hackers.

Those cases sit within an even wider pattern, with analysis from on-chain security provider Hacken estimating that halfway through this year, more than $3.1 billion had already been stolen, exceeding the full-year tally for 2024.