UPbit has introduced an artificial intelligence-backed Fraud Detection System (FDS) that would help it prevent financial fraud.
UPbit, a prominent South Korean cryptocurrency exchange, revealed it suffered 159,061 hacking attempts during the first half of this year, according to data shared by the firm’s operator, Dunamu, with South Korean politician Rep. Park Seong-jung.
The data paints a stark picture of growing risks as hacking attempts skyrocketed from 8,356 in the latter half of 2020 to more than 159,000 in the first half of this year. In practical terms, this equates to an alarming 1,800% surge in attacks on UPbit over the past three years.
The increase in cyberattack attempts underscores the vulnerability of numerous cryptocurrency exchanges. Recently, the HTX exchange fell victim to a hack that resulted in a loss of approximately $8 million in Ethereum (ETH).
UPbit is one of the largest South Korean crypto platforms. In August, the platform accounted for around 6% of the total trading volumes across centralized exchanges, outtrading rivals like Coinbase and OKX.
UPbit enhances security measures
However, UPbit is taking proactive steps to fortify its security infrastructure in response to the growing threat landscape.
The exchange plans to increase its cold wallet holdings to 70%. Cold wallets are known for their resilience against hacking attempts, offering protection against cyber threats. This move aims to bolster the safeguarding of Upbit’s assets, as hot wallets have historically been more vulnerable to hacking incidents.
Furthermore, Upbit is introducing new security protocols for its hot wallet funds. These hot wallets will now operate within a multi-layer security structure, adding another layer of protection to these assets.
Besides that, the exchange has also introduced an artificial intelligence-backed Fraud Detection System (FDS) that would help it prevent financial fraud.
Government’s role in cybersecurity
Rep. Park Seong-jung acknowledged the rising frequency of cyber attacks on cryptocurrency platforms, noting that the government’s role in managing these incidents remains unclear.
In light of this, Seong-jung urged the Ministry to conduct white mock hacking tests to assess the information security preparedness of businesses, including virtual asset exchanges, that handle personal information.
This move aims to gain a deeper understanding of the evolving information security landscape and ensure the protection of sensitive data.