Was Upbit Hack An Attempt To Evade Taxes?

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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. 

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.

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.

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!

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.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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