South Korean cryptocurrency exchange GDAC has reported a security breach on its platform, resulting in a loss of $13 million worth of digital assets from its hot wallet. The incident took place on April 9, following which the exchange suspended deposits and withdrawals to conduct an investigation.
What Happened?
An unknown party hacked GDAC’s hot wallet and transferred 10 million Wemix tokens, 60.80 bitcoins, 350 ether, and 220,000 USDT stablecoin to an external wallet. According to the exchange’s announcement, these stolen assets represent about 23% of GDAC’s total value of customer assets on the platform.
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GDAC has suspended its wallet system, including deposits and withdrawals, and shut down related servers to avoid further losses. The exchange has informed the local police and the Korea Internet & Security Agency (KISA) of the breach and is cooperating in the ongoing investigation.
GDAC has not provided details on the security issues that led to the breach. It has also not disclosed a timeline for resuming deposits and withdrawals, citing the need to address the security issues that caused the incident.
GDAC’s Wallet System
GDAC, like other centralized cryptocurrency exchanges, uses both hot and cold wallets to manage user funds. Hot wallets are connected to the internet, allowing for fast deposits and withdrawals but making them more susceptible to cyber attacks. In contrast, cold wallets are offline storage solutions that offer greater security against hacks.
The loss incurred by GDAC is the latest in a series of high-profile security breaches involving cryptocurrency exchanges. The incident highlights the importance of strong security measures to safeguard digital assets against theft, and the need for regulators to ensure the safety of investors on cryptocurrency platforms.
In response to such attacks, exchanges must continuously improve their security measures to stay ahead of evolving threats and safeguard the interests of their customers.
