South Korea’s Financial Supervisory Service (FSS) has started formal sanctions proceedings against Dunamu, which runs the crypto exchange Upbit, after a $36 million hack in November 2025.
The regulator sent the company an inspection opinion letter, giving Dunamu a chance to respond before any sanctions are decided. The case looks at whether Upbit broke the country’s Virtual Asset User Protection Act and whether the exchange delayed telling users about the breach.
According to local reports, the hack lasted for about 54 minutes on Nov. 27, 2025. However, Upbit disclosed the incident only later that day, after a merger-related event involving Naver Financial had concluded. The delay drew criticism from regulators and the public.
The FSS is checking if the exchange failed to meet its duties under the Virtual Asset User Protection Act. The law does not currently have specific penalties for cyberattacks, but authorities are thinking about changes to fix this gap.
The next phase of South Korea’s Digital Asset Basic Act is expected to include rules for sanctions after hacks, computer failures, and compensation for affected users.
THE BLOCK: South Korea’s financial watchdog has begun sanction procedures against Upbit operator Dunamu over last November’s hack, sending the company an inspection report nearly eight months after the incident, per SBS.
The breach drained 44.5 billion won ($30 million) in… pic.twitter.com/q9MHtt0Sfv
— The Block (@TheBlockCo) July 19, 2026
After the attack, Upbit froze about 2.3 billion won (around $1.5 million) in suspicious funds. The exchange also promised to fully reimburse affected customers with its own money.
To improve security, Upbit rebuilt its wallet system and moved assets from affected wallets. In December 2025, the company also launched an automated blockchain tracking tool called Onchain AI Tracer System to monitor stolen funds and help with recovery.
Upbit is still one of the world’s biggest cryptocurrency exchanges and is currently third in CoinMarketCap’s spot exchange rankings for trading activity, liquidity, and traffic. The regulator’s findings and Dunamu’s response will decide if more enforcement action is needed.
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