Upbit hack puts Binance’s emergency freeze policy under scrutiny

According to South Korean broadcaster KBS, Binance reportedly froze only a portion of funds that police said were linked to a hack on local crypto exchange Upbit, one of South Korea’s largest exchanges, on Nov. 27.

KBS reported Friday that investigators requested Binance freeze approximately 470 million Korean won (approximately $370,000) in Solana (SOL) tokens believed to be associated with the incident. However, the exchange ultimately blocked about $55,000 (roughly 17% of the requested amount) after a delay of about 15 hours.

According to the report, Binance cited the need for additional verification when responding to the police request.

As a result of the hack, Upbit suffered unauthorized withdrawals of Solana‑based assets valued at roughly $36 million, prompting a formal police probe and efforts by the exchange to track and freeze stolen funds across multiple platforms.

The importance of rapid initial freezes

KBS quoted Cho Jae‑woo, director of Hansung University’s Blockchain Research Institute, as saying that rapid initial freezes can be important for limiting damage in hacking cases. However, exchanges often refer to litigation risks as “an excuse” for being resistant to such requests. He added that establishing a global hotline between exchanges with the emergency freeze authority could help to mitigate the damage.

The incident draws attention to how major centralized exchanges respond in practice when foreign law enforcement agencies request freezes on assets suspected of being tied to hacking incidents.

Related: South Korea to impose bank-level liability on crypto exchanges after Upbit hack: Report

An Upbit spokesperson told Cointelegraph that they could not comment on the incident reported by KBS; however, they stressed that local law enforcement is “actively investigating” to identify the attackers.

“Upbit is working closely with the authorities, and we have additionally asked major global exchanges to freeze any assets detected from the related wallets.”

In a statement shared with Cointelegraph, a Binance spokesperson said that they could not comment as a matter of policy, but confirmed their commitment to “cooperating with relevant authorities and partners wherever appropriate.”

Binance responds to all law enforcement requests exclusively through an official channel, the spokesperson said, and works closely with agencies worldwide to support investigations into illicit activity.

Upbit said that it would provide further updates as they become available.

Related: South Korea targets sub-$680 crypto transfers in sweeping AML crackdown