Key Takeaways
- Binance froze only a fraction of the funds South Korean police requested after the Upbit hack.
- Authorities traced roughly 470 million won in stolen assets to Binance, but only about 17% was frozen.
- The case highlights gaps in cross-border crypto enforcement as South Korea pushes stricter rules.
When South Korean police traced stolen funds from the Upbit hack to Binance, they expected swift action.
What followed instead was a partial freeze and a delayed response.
Binance Freezes Only a Portion of Requested Funds
According to public broadcaster KBS, South Korean police requested that Binance freeze roughly 470 million won (about $370,000) in Solana-based tokens linked to the recent Upbit hack.
The funds had been traced to wallets associated with the exchange.
Binance ultimately froze about 80 million won, or roughly 17% of the requested amount, citing the need for additional verification.
Local publications reported that Binance freezed the funds 15 hours after the request was made.
The partial compliance has drawn attention because Binance only recently re-entered the South Korean market after years of regulatory absence, following its acquisition of local exchange Gopax.
Binance Responds
In comments to CCN, Binance said:
“We were made aware of the Upbit incident shortly after it occurred and immediately offered our support to help contain the impact.
Based on the information available to us, Binance has no indication of any direct exposure to this incident, and our funds remain safe.
We are working closely with local law enforcement, Upbit, and other parties supporting recovery efforts. As a result, we were able to help secure a portion of the funds and mitigate additional transactions.
We will continue to monitor the situation closely and provide support as needed.”
Background: The Upbit Hack
Upbit, South Korea’s largest cryptocurrency exchange, disclosed late last month that attackers had exploited a vulnerability in its Solana-based hot wallet.
In a span of less than an hour, hackers siphoned funds across 24 Solana ecosystem tokens, with losses estimated at 44.5 billion won (roughly $33 million) at the time of the attack.
The exchange moved quickly to contain the breach, suspending Solana-related deposits and withdrawals within minutes and later confirming that all customer losses would be covered using internal reserves.
While investigators were able to trace a portion of the stolen assets to Binance, most of the funds were dispersed across multiple wallets and platforms, complicating recovery efforts.
Binance’s Limited Response
Legal experts cited in local reports pointed to a familiar issue.
There is no binding legal mechanism under South Korean law that compels foreign exchanges to freeze funds solely at the request of domestic police.
While exchanges often cooperate voluntarily in cases involving sanctions, terrorism financing, court orders, or crypto theft investigations frequently fall into a gray area.
Without a formal international agreement or court mandate, compliance remains discretionary.
This gap helps explain why Binance’s response stopped short of a full freeze, despite past instances of deeper cooperation.
In earlier Upbit-related thefts in 2019 and 2020, Binance had frozen Ethereum tied to stolen funds in full.
Regulatory Pressure Builds in Seoul
The incident is now feeding into a broader policy debate in South Korea.
Lawmakers and regulators have been accelerating work on stricter digital asset rules following a string of high-profile breaches.
Under proposals tied to the Digital Asset Basic Act, exchanges could soon be required to compensate users for losses from hacks regardless of fault, bringing crypto platforms closer to bank-like liability standards.
Officials have signaled that parts of the framework could take effect as early as January 2026.
The Financial Supervisory Service has also emphasized tougher audits, security requirements, and penalties, framing cybersecurity as a systemic risk rather than an operational detail.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
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