Upbit Bolsters Security: Moves 99% of Crypto Assets to Cold Storage

In a decisive move to lock down digital vaults, South Korea's leading crypto exchange Upbit has shifted the overwhelming majority of its assets offline.

The Cold Hard Truth

The platform now stores a staggering 99% of user crypto holdings in cold wallets—air-gapped storage devices completely disconnected from the internet. This isn't a gradual shift; it's a near-total migration of hot wallet funds to the deepest freeze.

Why Offline is the New Safe

Hot wallets, while convenient for quick transactions, are perpetual targets for hackers. By moving assets offline, Upbit slashes the attack surface, making a large-scale digital heist virtually impossible. It's the crypto equivalent of moving the crown jewels from a storefront window to a fortified underground bunker.

The Trust Equation

For users, this translates to one thing: reduced counter-party risk. Your assets aren't just sitting on a server waiting for the next clever exploit. In an industry where 'proof-of-reserves' is becoming a regulatory mantra, this kind of transparency action speaks louder than any audit report—though it does make you wonder why storing customer funds securely is considered a headline-worthy 'feature' and not the absolute baseline.

Upbit's vault door just got a lot thicker. The rest of the industry is now on the clock to match its security standard or risk looking dangerously exposed.

What happened in the hack

The breach affected Solana’s SOL tokens as well as ORCA, RAY, and JUP. Upbit used its Automatic Tracking Service to freeze $1.77 million of the stolen funds, though the rest appears to be lost.

The company has promised that it WOULD pay for all losses from its own reserves, so users do not lose their money. After the hack, Upbit checked all its wallets and made its systems tighter. It also changed the way money moves in the exchange.

What this means for users and the market

Moving nearly all funds offline reduces the risk of hacks but may slow withdrawals, especially during busy trading periods.

In a post on X, CryptoQuant CEO Ki Young Ju said that when withdrawals paused after the hack, altcoins spiked in price due to trapped liquidity, which shows the effects of limited access to global markets. With daily trading volumes over $1.1 billion, according to data from CoinMarketCap, Upbit’s action has major implications for the market.

Upbit got hacked and paused withdrawals, but Koreans are pumping alts since arbitrage bots are no longer running. pic.twitter.com/Y1AnRDqrgz

The overhaul also sets a new security benchmark in South Korea. CEO Oh Kyung-seok emphasized that protecting customer assets now sits at the center of the company’s decision. This shows that Upbit is putting safety first, even if it makes trading a bit slower. Before this change, most South Korean exchanges kept 82%–90% of funds offline, but Upbit now has the lowest hot wallet share in the country.

The company hopes this MOVE will make customers feel safe and encourage other exchanges to improve security. Meanwhile, South Korean regulators are also thinking about new rules that would make exchanges responsible for losses from hacks, similar to banks.

Also Read: Upbit Urges Users to Create New Deposit Wallets in Wake of $37M Hack