Was Upbit Hack An Attempt To Evade Taxes?

Supriya Saxena
November 28, 2019 Updated September 2, 2024
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CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

With news of Upbit exchange hack doing rounds, there is yet another twist to the whole Saga. Jeff Paik, CEO at Finector has thrown light on the fact that how this case can be one of the instances of crypto exchanges hacking themselves to avoid taxes. 

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The Case of Bithumb Hack

Jeff Paik reiterated the example of Bithumb in 2018 when the Korean Tax Service asked Bithumb to pay $30 MM in taxes. Interestingly, Bithumb got hacked of $35 MM a few days later. As a matter of fact, Upbit was ordered to pay 50-60m taxes in Jan 8, 2019, and yesterday, Upbit got hacked of $50 MM. 

Source- Twitter

A twitter user, Zack Voell said that this conspiracy made complete sense as the exchanges would rather lose their customers but not pay taxes. 

Source- Twitter

The tweet also saw Co-founder of Pocket Nodes commenting that what a fabulous conspiracy it was. 

Source- Twitter

Another, interesting fact was revealed by Su Zhu, CEO, Three Arrows. He revealed how aside from the 1k GWEI gas fee and 200k gas limit, the hacker left 1113.76 ETH remaining in Upbit’s hot wallet. When the hacker could have easily taken the full 343K ETH. 

Source- Twitter

 

On which, twitter user, Crypto Loomdart responded that probably the hacker had some Ethereum(ETH) balance on Upbit. Also, it is likely that the hacker buys some dips on Ether when the news of theft is out in public. 

Source- Twitter

Anthony Yoon, head of partnerships at The Spartan Group mentioned that markets have not been performing that well in South Korea and new listings on exchanges continue to perform poorly. He further hinted that Upbit has paused any listings.

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Joseph Young Believes Upbit Hack Is An Insider Job

Joseph Young, a leading crypto journalist, said that taking Upbit’s statement on cold stage transfers at face value, there are high chances that an exchange employee is behind the whole thing and has taken advantage of the storage transfers to carry out the theft.

He said,

Interestingly, Upbit has promised to cover all user assets with corporate funds and also informed that withdrawals will take at least two weeks to resume.

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Stolen ETH Is Moving

As reported by Coingape,  the Upbit hacker has started moving the stolen ETH to other addresses. The movement saw 112,020 ETH worth over $17 million in all being transferred to two addresses. The two newly created addresses start with 0x9A207194cb and 0x3408EdCa2d respectively.

Will Upbit manage to restore users’ funds and build the lost trust again? Let us know, what you think in the comment below!

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Coming from a physics background the unpredictability and intrigue of the cryptoverse attracted me to take a dive in this field. I am all eyes and ears for the latest trends in blockchain and crypto sphere. Whenever I am not writing or researching, I love to read sci-fi novels, play basketball and watch action movies. I strongly believe that blockchain and cryptocurrency will bring lasting transformations in people’s lives in the years to come. You can reach out to me at supriya [at] coingape.com.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.