UPbit, one of South Korea’s largest cryptocurrency exchanges, announced today that it lost almost US$50 million worth of ether (ETH) in an apparent security breach.

According to Lee Seok-woo, the CEO of the exchange’s operator Dunamu, around 342,000 ETH were moved from the platform’s ‘hot wallet’ to this unrecognized wallet today shortly after 1 p.m. local time. Client funds were not affected, said the South Korea-based cryptocurrency exchange.

"At approximately 13:06 on November 27th, 2019 (KST), 342,000 ETH was sent from Upbit’s Ethereum hot wallet to an anonymous wallet address - 0xa09871AEadF4994Ca12f5c0b6056BBd1d343c029. We took immediate actions to protect your assets, and no investors’ assets were lost.

Actions include:

• Suspensions of all crypto-asset deposits and withdrawals
• Transfer of all crypto-assets to cold wallets. (Please note that all large-scale asset transfers following the ETH transfer was part of this process.)

In addition, Upbit will replace the 342,000 ETH with the company’s assets immediately.

We will announce again after the completion of this process."

The incident was also noted on Twitter by Whale Alert, a service that tracks major cryptocurrency transactions.

UPbit said that, in the wake of the incident, it moved all virtual coins to cold wallets. Cold-storing is a method used for the long-term storage of cryptocurrencies offline in order to reduce the likelihood of funds being stolen.

The exchange has also halted all deposits and withdrawals and said that, in order to protect its clients’ virtual funds, the transactions will remain suspended for two weeks. The exchange said that it will cover the loss from its own funds. Additional details are scarce; notably, there’s no word on how the theft is thought to have taken place.

Months ago, UpBit's users were targeted in a phishing campaign with a fake giveaway used as the pretense. Weeks earlier, another major South Korean cryptocurrency exchange, Bithumb, lost up to US$20 million worth of digital money in a suspected inside job.

Cryptocurrency theft has surged in 2019 compared with last year, with more money flowing through digital exchanges and criminals looking to carry out bigger heists, according to a report from blockchain forensics company CipherTrace.

Losses from digital currency crime soared to $4.4 billion in the first nine months of the year, up more than 150% from $1.7 billion in all of 2018.