South Korean Regulator Initiates Sanctions Against Dunamu Following Hack
Vexoda Newsroom
The South Korean Financial Supervisory Service (FSS) has begun the sanctions process against Dunamu, operator of Upbit crypto exchange, following a $36 million hack in November 2025. This marks an imp
The South Korean Financial Supervisory Service (FSS) has initiated the sanctions process against Dunamu, the operator of Upbit crypto exchange, following a significant $36 million hack in November 2025. This development comes amid concerns over the lack of explicit sanctions provisions for hacking and computer system incidents under South Korea’s Virtual Asset User Protection Act.
The FSS has sent an inspection opinion letter to Dunamu regarding the breach. The move signifies formal regulatory action, providing Upbit with a chance to respond before facing potential penalties. Local news outlet Yonhap News reported that Upbit faced criticism for delaying its announcement of the hack, which lasted 54 minutes starting at 4:42 a.m. KST on November 27th.
The Virtual Asset User Protection Act currently lacks direct sanctions related to cyberattacks or computer hacks. As part of addressing this gap, South Korean authorities plan to add sanctions and compensation provisions for hacking and system failures in the second phase of the Digital Asset Basic Act. Upbit has already taken steps to mitigate risks by freezing funds, reimbursing affected customers, and launching an onchain tracking service.
Upbit’s response to the hack involved several measures: it froze approximately 2.3 billion won ($1.5 million) in user funds, initiated a comprehensive overhaul of its crypto wallet architecture, and developed an automatic onchain tracing system called Onchain AI Tracer System. These actions underscore Upbit's commitment to transparency and customer protection.
The implications for the broader market are significant as this incident highlights potential vulnerabilities within major exchanges. Given that Upbit ranks third in global rankings based on traffic, liquidity, and trading volumes, its compliance issues could set a precedent for other exchanges operating under similar regulatory frameworks.
Traders should closely monitor Dunamu's response to these sanctions and the broader implications of this case. The outcome will likely influence future regulations regarding cybersecurity measures within South Korea’s crypto ecosystem.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.