South Korea Investigates Upbit Crypto Exchange Over $36M Hack

South Korea's financial watchdog is turning up the heat on one of the world's biggest crypto exchanges. Dunamu, the company that runs the popular exchange Upbit (a platform where people buy and sell cryptocurrencies), is now facing a formal investigation over a major hack.

What happened?

Back in November 2025, hackers broke into Upbit and stole about $36 million worth of crypto. The Financial Supervisory Service (FSS) — South Korea's main financial regulator, which is like a government referee for banks and money companies — has now sent Dunamu an "inspection opinion letter."

This letter is important because it officially starts a punishment process. It gives Dunamu a chance to explain its side before the regulator decides on any penalties.

Why is Upbit in trouble?

• The hack lasted about 54 minutes, starting at 4:42 a.m. local time on Nov. 27.
• Upbit waited until the end of the day to tell the public — after a business deal involving internet giant Naver Financial had wrapped up.
• Critics say this delay put customers at risk without warning.

Here's the tricky part: South Korea's Virtual Asset User Protection Act (a law meant to protect crypto users) doesn't clearly say how to punish companies for hacks. Because of this gap, authorities plan to add new hacking and compensation rules in a future law called the Digital Asset Basic Act.

What Upbit did to respond:

• Froze around 2.3 billion won (about $1.5 million) in suspicious funds.
• Promised to fully repay affected customers using its own money.
• Rebuilt its crypto wallet system to fix weak spots.
• Launched an AI tool to track where the stolen money went.

Upbit is currently the third-largest crypto exchange in the world, with about $478 million traded in a single recent day. This case shows regulators are getting serious about holding exchanges accountable — even when the rulebook isn't fully written yet.

This is an AI-generated summary. Read the original article at: https://cointelegraph.com/news/south-korean-regulator-inspection-letter-upbit-36m-hack?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound