- South Korea’s Financial Supervisory Service formally began sanctions against Dunamu, Upbit’s operator, after the $36 million November 2025 hack.
- Upbit faced criticism for delaying the attack disclosure by nearly 12 hours until after a related corporate event.
- Regulators are reviewing whether the exchange violated the Virtual Asset User Protection Act, which lacks direct sanctions for hacks.
- Upbit fully reimbursed affected customers and developed an onchain tracing system to recover stolen funds.
- The exchange ranks third globally on CoinMarketCap’s spot exchange rankings.
South Korea’s Financial Supervisory Service has sent an inspection opinion letter to Dunamu, the operator of crypto exchange Upbit, regarding the $36 million hack that occurred in November 2025, according to Yonhap News.
The letter marks the formal start of a sanctions procedure, giving Dunamu an opportunity to respond before the regulator announces proposed penalties. The breach lasted about 54 minutes starting at 4:42 a.m. KST on November 27, yet Upbit only disclosed the exploit at the end of the day, after a merger-related event involving internet giant Naver Financial concluded.
Consequently, the financial regulator is reviewing whether the exchange violated the Virtual Asset User Protection Act, which currently provides no direct sanctions for cyberattacks. South Korean authorities plan to address this gap by adding sanctions and compensation provisions for hacks and system failures in the second phase of the Digital Asset Basic Act.
Meanwhile, Upbit said it froze approximately $1.5 million worth of funds and fully reimbursed affected customers using its own balance sheet assets, as detailed in a company statement. The exchange also initiated an overhaul of its crypto wallet architecture and migrated all assets from compromised wallets.
In December 2025, Upbit announced the development of an automatic onchain tracking service, the Onchain AI Tracer System, to trace stolen funds and aid recovery. Upbit currently ranks third in CoinMarketCap’s crypto spot exchange rankings based on traffic, liquidity, and trading volumes.
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