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Until Oct 2025, the total number of cryptocurrency exchange hacks was 5, and now it's at 6. Yes, South Korea's biggest cryptocurrency exchange, Upbit, was hacked. This incident once again exposed just how vulnerable even established exchanges are, and it underscores the importance of military-grade security. If you're planning to build a trading platform, viewing your crypto exchange development company as your first line of defense is the most important decision.
On November 27, 2025, Upbit detected unauthorized outflows from a hot wallet that held Solana-network assets. The total loss was $36–37 million worth of digital tokens. The exchange immediately paused deposits and withdrawals and froze certain affected tokens as a move that prevented further damage.
The hijacked assets included Solana-based cryptocurrencies and stablecoins. Notably, this was not Upbit’s first major breach. In 2019, hackers allegedly linked to a notorious cyber-espionage group stole roughly $42 million in Ethereum from the platform.
The breach happened just after the parent company of Upbit, Dunamu, announced a $10 billion all-stock acquisition by tech giant Naver. The timing suggests hackers deliberately selected a high-profile moment, possibly to maximize chaos, visibility, or profit.
Authorities in South Korea are now investigating whether the breach was orchestrated by the state-linked Lazarus Group, a well-known North Korea-affiliated hacking collective. Reports suggest the attack could have involved hijacked or compromised admin credentials as a tactic the same group reportedly used in the 2019 breach.
That’s more than just a typical cybercrime. It points to a sophisticated, potentially state-sponsored operation. Given past links between Lazarus and crypto thefts, which is often used to help finance illicit activities, this raises the alarm for anyone building a crypto business.
For exchange founders, this isn’t only about smart contracts or secure wallets. It’s about defending against highly organized, determined adversaries, that ones with ample resources, patience, and motivation.
The Upbit hack has rattled confidence across the crypto industry. Upbit, one of South Korea’s largest and most trusted exchanges, was considered secure until now. Losses from crypto hacks and exploits in 2025 alone have reportedly topped $2.4 billion, making this year possibly the worst for crypto security since the early days of DeFi.
As more institutions and potentially mainstream fintech players get into the crypto sector, such high-profile breaches threaten to slow adoption. Investors, regulators, and users alike will demand far stricter security and accountability. If you are building a new exchange, remember that you’re building trust. And trust, once broken, is far harder to rebuild than code.
Below are the essential, must-have security practices any serious exchange should implement, and a crypto exchange development company should note.
o Cold / Hot Wallet Segregation & Multi-Party Control
Never keep all funds in a single hot wallet. Critical assets should live in cold wallets as offline, hardware-secured, and with private keys split across multiple custodians. Hot wallets must be strictly limited in size and subject to stringent monitoring.
o Role-based Access & Zero-Trust Architecture
Admin privileges should be staggered, and no single person should hold full power. Use a zero-trust model where each action (withdrawal, transfer, etc.) requires multi-party approval, ideally implemented with cryptographic signing and hardware security modules.
o Timely Audits & Penetration Testing (Internal + External)
Regularly audit smart contracts, backend systems, and wallet management. Ideally, engage both internal security teams and third-party auditors. Use penetration testing with red-teaming to simulate real-world attacks, especially admin-credential hijacking, phishing, and insider threat scenarios.
o Blockchain-Level Monitoring & Real-Time Alerting
Deploy real-time blockchain monitoring to detect unusual outflows or token swaps. If funds move above a small threshold, freeze and flag for manual review. Use automated alerting tied to risk thresholds.
o Insurance / Reserve Funds & Transparent Risk Policy
Hold adequate reserves to cover worst-case losses. Be transparent with users about risk policies and emergency procedures. If a breach occurs, as in Upbit’s case, make sure losses are covered and users face no damage.
o Disaster Recovery & Incident Response Plan
Have a tested incident response plan including wallet freezes, migration to new keysets, legal & regulatory compliance, and transparent user communication. Every minute stolen funds remain in hot wallets increases the risk of laundering beyond recovery.
o Compliance & Regulatory Readiness
Depending on jurisdiction, prepare for KYC/AML procedures, regulatory audits, and cooperation with law enforcement. A compliant exchange is more resilient to state-backed threats and more trusted by users and institutions.
If you’re founding a crypto exchange, your choice of development partner can decide the future of your product. Building a user interface or backend is relatively straightforward, but architecting a secure, strong, and compliant exchange platform, one that can withstand attacks like the Upbit hack, is a different ballgame altogether.
A top-tier crypto exchange development company brings:
o Deep experience with wallet architecture (cold vs hot) and blockchain operations
o Security-first design philosophy from day one, threat modelling to continuous auditing
o Implementation of advanced safety measures like multi-signature wallets, hardware key storage, role-based access, and real-time monitoring
o Understanding of regulatory compliance, risk management, and disaster-recovery planning
Upbit’s $36 M breach is more than just a dramatic news story. It’s a harsh, real-world stress test that reveals the weak points even in major exchanges. For founders and builders, it’s a warning that security cannot be an afterthought; it needs to be the foundation.
If you’re serious about launching a crypto exchange in 2026, start by partnering with a seasoned cryptocurrency exchange development company that understands how to build for resilience. Because in crypto, trust is everything. And once trust is broken, it’s nearly impossible to rebuild.
