South Korean Exchange GOPAX Suspends Operations, Transfers Assets to Cold Wallets Following Hack Threat
Following a threatening email warning of a potential cyberattack, South Korean cryptocurrency platform GOPAX has halted all trading activities, deposit functions, and automatic withdrawal services, though customers may process withdrawals manually via customer support.
Following receipt of a threatening email indicating plans for a potential cyberattack, South Korean cryptocurrency platform GOPAX took the decision to suspend all trading activities, deposit functions, and automated withdrawal processing on Friday, as reported by Kyunghyang Shinmun, a local news publication.
According to statements made to the newspaper by a representative from GOPAX, the exchange had not experienced any actual security breach or theft attempt at the time of the suspension.
According to a company announcement, GOPAX disabled deposit and automated withdrawal functionality at 5:55 am UTC. A subsequent notification indicated that all trading operations ceased at 6:53 UTC. The exchange also canceled all outstanding orders that had not been executed.
The exchange announced its intention to migrate the entirety of its cryptocurrency holdings to offline storage solutions as a protective measure for its user base, citing a pattern of data breaches and cyberattacks targeting financial service providers. The platform's official statements referenced guidance provided by financial regulatory authorities.
An attempt to obtain commentary from GOPAX was made by Cointelegraph, however no response had been provided at the time this article was published.
While automated withdrawals remain unavailable, customers retain the ability to submit withdrawal requests directly through GOPAX's customer support channels, though the platform cautioned that the manual verification process and approval requirements may result in extended processing timeframes.
The operational halt occurred just days following recommendations from South Korea's Financial Services Commission (FSC) advising cryptocurrency exchanges operating within the country to expand their cold-wallet storage allocations in the aftermath of the $6.3 billion Binance hack. Regulatory requirements mandate that South Korean exchanges must maintain a minimum of 80% of customer crypto assets in cold storage.
Information disclosed by the Financial Supervisory Service indicated that as of the conclusion of September, GOPAX maintained 80.54% of user assets in offline storage, positioning the exchange just above the mandated minimum threshold.
During October, the FSC disclosed findings revealing cybersecurity vulnerabilities and inadequacies at 130 out of 555 financial institutions examined across the nation. The regulatory body additionally named GOPAX operator Streami and crypto exchange Prabang among 16 companies that had been involved in previous security-related incidents, leading to proposals for enhanced cybersecurity monitoring and oversight.
In a separate incident, South Korean cryptocurrency platform Prabang similarly halted its services following the detection of suspicious withdrawal activity originating from its hot wallet on Oct. 24. According to reports from Yonhap News Agency, the exchange disclosed losses totaling approximately 100 million won ($70,000). Prabang committed to compensating impacted users utilizing company funds.