South Korean crypto exchange GDAC reports $13 million loss in 'hot wallet' hack

Quick Take

  • South Korea-based crypto exchange GDAC reported a hack on its hot wallet that resulted in a $13 million loss.
  • The incident occurred on April 9, leading to the suspension of deposits and withdrawals on the platform.

South Korea-based cryptocurrency exchange GDAC reported that it had suffered a security breach, resulting in the theft of approximately $13 million worth of digital assets from its hot wallet.

The incident occurred on April 9, and the exchange has since suspended deposits and withdrawals while authorities investigate the matter.

According to GDAC's announcement, an unknown entity hacked its hot wallet and illegally transferred 10 million Wemix tokens ($10.7 million), 60.80 bitcoin ($1.7 million), 350 ether ($647,000), and 220,000 USDT stablecoin to a third-party wallet. The stolen assets represented roughly 23% of GDAC's total value of customer assets on the platform, it claimed.

In response to the breach, GDAC immediately suspended its wallet systems, including deposits and withdrawals, and shut down related servers to mitigate further losses. The exchange has informed the local police and the Korea Internet & Security Agency (KISA) of the incident and is cooperating in the ongoing investigation.

The firm, however, did not disclose the security issues that may have allowed the incident to take place.

GDAC has not provided a timeline for when deposits and withdrawals will resume, citing the need to thoroughly investigate and address the security issues that led to the breach.

Centralized cryptocurrency exchanges like GDAC typically use a combination of hot and cold wallets to manage user funds. Hot wallets, which are connected to the internet, allow for fast deposits and withdrawals but are more vulnerable to hacks. Cold wallets, on the other hand, are offline storage solutions that offer greater security against cyber attacks.

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