Binance Freezes Only 17% of Upbit Hack Funds After 15 Hours — Crypto Community Calls It a ‘Big Miss’!
Binance Faces Scrutiny in South Korea After Only Freezing 17% of Upbit Hack Funds
South Korean authorities are raising serious concerns about Binance’s response to a major hacking incident involving local exchange Upbit, after new investigative reports revealed that the world’s largest crypto exchange froze only a small portion of the stolen assets. The controversy, which has now sparked renewed debate about global exchange accountability, centers on how quickly major trading platforms should act when they are alerted to large-scale crypto theft.
According to national broadcaster KBS, South Korean police formally requested that Binance freeze approximately 470 million KRW worth of Solana (SOL) linked to the Upbit hack. However, Binance ultimately froze just 80 million KRW—roughly 17 percent of the funds traced to its platform. Even more concerning to investigators is the timeline: Binance applied its partial freeze nearly 15 hours after police made the initial request.
Regulators, security experts, and industry watchers say the delay may have allowed hackers to escape with a significant portion of the stolen funds. It also highlights what some describe as a growing gap between the speed of blockchain-based financial crime and the slower pace of international coordination among major crypto exchanges.
As stolen funds move faster across blockchains and laundering techniques become more sophisticated, South Korean authorities say exchanges must modernize their emergency protocols if they hope to keep pace with increasingly agile cybercriminals.
Hackers Moved Through Thousands of Wallets Before Reaching Binance
Investigators say the Upbit hackers executed one of the most intricate crypto laundering operations South Korea has seen in years. Security analysts traced the stolen assets through an elaborate, multi-stage process designed to fragment, obscure, and disguise the movement of funds.
Instead of sending the stolen Solana tokens to a single wallet or centralized exchange, attackers spread the assets across more than a thousand wallets. Analysts found that the hackers used rapid, repeated deposits and withdrawals—sometimes referred to as “chain-hopping”—to make the money trail difficult to follow.
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| Source: Xpost |
They also relied on cross-chain bridges, decentralized swaps, and token conversions to move the assets between chains, coin types, and liquidity pools. These techniques are now commonly used by professional hacking groups, including those linked to state-sponsored cybercriminal networks.
After passing through a long series of intermediary wallets, investigators report that a large share of the stolen assets eventually landed on Binance. Such funnels are not unusual due to the exchange’s massive liquidity and global reach, making it a frequent endpoint for illicitly obtained crypto. As soon as authorities discovered that stolen assets had reached Binance, they urgently requested an immediate freeze.
The hope was that the hackers had not yet withdrawn or swapped the tokens again. But as investigators now report, the slow response from Binance significantly reduced the amount of recoverable funds.
A 15-Hour Delay Raises Hard Questions for the Crypto Industry
KBS reports that Binance did not notify Upbit of any action until close to midnight on November 27. By then, nearly 15 hours had passed since police submitted the emergency request.
Experts argue that this window of time is long enough for hackers to move funds multiple times across various chains, assets, and services. Because crypto transactions occur 24/7 and laundering operations often rely on automated scripts, funds can cycle through dozens of steps in minutes, not hours.
Professor Cho Jae-woo of Hansung University expressed concern over the delay, emphasizing that speed is the single most critical factor after a crypto hack. Once stolen funds move into deeper layers of the blockchain ecosystem, tracing them becomes exponentially more difficult.
“Exchanges often hesitate because of legal uncertainty,” Cho said in an interview. “But hesitation allows criminals to stay ahead of enforcement. We urgently need a more standardized and global emergency framework that exchanges can rely on.”
Cho suggested the creation of an international crypto emergency response network—a worldwide hotline or rapid-response team with predefined authority to act on freeze requests in real time. Such a system could function much like global fraud monitoring systems used by banks, which enable instant transaction blocks during suspected criminal activity.
Without such coordination, he argued, the crypto industry will continue to lose critical battles against cross-border cybercrime.
Binance Cites “Ongoing Investigation,” Gives No Reason for Partial Freeze
As of this writing, Binance has offered no detailed explanation for why it froze only a fraction of the stolen assets linked to the Upbit hack. The exchange also declined to clarify why its response took 15 hours.
In a brief statement, Binance said only that it “cannot comment on ongoing investigations” but is cooperating fully with law enforcement.
While Binance frequently works with global regulators on asset recovery, critics argue that the company has historically struggled with consistent and timely communication during fast-moving incidents. Some analysts also suggest that the legal and operational complexities of identifying tainted funds may have contributed to the partial freeze. If even a small percentage of the tokens passed through wallets typically used by legitimate users, additional verification steps might have been necessary.
Still, regulators stress that crisis intervention requires faster action. Many say exchanges must build dedicated emergency teams capable of responding instantly to freeze requests—rather than relying on standard operational procedures.
Most of the Stolen SOL Has Already Been Converted Into Ethereum
Investigators revealed that the majority of the stolen Solana-based tokens have since been converted into Ethereum. The conversion is notable because it suggests the hackers are preparing to liquidate the stolen assets.
Ethereum, second only to Bitcoin in liquidity, is significantly easier to convert into fiat currency across global markets. By moving assets into ETH, hackers can access deeper liquidity pools, use more sophisticated mixing services, and disperse funds across a wider array of exchanges and decentralized protocols.
The conversion also implies that attackers may be attempting to exit the Solana ecosystem entirely, potentially to avoid future monitoring or chain-specific tracing efforts.
Security researchers now believe that the bulk of the stolen assets may already be circulating across secondary markets or decentralized exchanges, making full recovery difficult.
Industry Experts Call for New Global Standards After Binance Incident
The incident has reopened longstanding conversations about how global exchanges should respond during cross-border crypto crimes. Traditional financial systems operate under strict anti-fraud frameworks that enable immediate freeze actions. Crypto exchanges, however, vary widely in their emergency procedures.
Analysts say several issues contributed to Binance’s slow response:
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Legal uncertainty regarding whether international freeze requests must come through local courts or regulators.
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Verification delays caused by distinguishing stolen funds from legitimate deposits.
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Chain-hopping complexity, which requires additional analysis before executing large freezes.
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Absence of a universally recognized emergency protocol across jurisdictions.
The Upbit hack has therefore reignited calls for a global standardized rapid-response network among exchanges, regulators, and blockchain forensic agencies. Such cooperation, analysts argue, is essential for limiting losses and ensuring criminals cannot exploit the slowest link in the chain.
South Korea’s Crypto Community Demands Higher Accountability
South Korea has one of the world’s most active crypto markets, and its exchanges are tightly regulated compared to many international platforms. News that Binance froze only 17 percent of the stolen assets has triggered frustration among local traders and industry leaders.
Many argue that South Korea’s domestic exchanges would have been required to act more quickly under local laws. Others say global exchanges must adopt a higher standard if they want access to markets with stringent financial regulations.
Local analysts also warn that delays like this weaken public trust in crypto security, especially during a period when digital asset adoption is rising rapidly.
Conclusion: A Wake-Up Call for the Global Crypto Industry
The Binance–Upbit case underscores a core challenge in modern digital finance: crypto crime moves at near-instant speed, while global regulatory coordination remains slow and fragmented. As hackers deploy more advanced laundering tools, exchanges face increasing pressure to modernize their emergency protocols.
Whether this incident leads to meaningful reform remains to be seen. But industry observers say one thing is clear: without faster response systems, even the largest exchanges may struggle to keep criminals from slipping through the cracks.
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