Dunamu Secures Contract for Digital Asset Management
Dunamu, the operator of the Upbit cryptocurrency exchange, has successfully secured a one-year contract to manage digital assets confiscated by South Korea’s National Police Agency. This agreement, announced on August 7, follows Dunamu’s victory in a public tender process aimed at establishing a secure custody arrangement.
Details of the Contract
The competitive bidding process, which started earlier in the year, culminated with Dunamu emerging from negotiations as the chosen contractor, transitioning from its previous status as the preferred bidder. Under the terms of the contract, Dunamu is tasked with overseeing cryptocurrencies seized during police investigations, utilizing its proprietary Upbit Custody service.
As part of the procurement, which was conducted through the open competitive tender administered by South Korea’s Public Procurement Service, Dunamu achieved the highest technical score of 94.14. Previous records indicated that the financial value of the contract is estimated at 267 million won (around $195,000) for an entire year of custody and management services.
Security Measures and Technology
Dunamu’s custody platform is designed to ensure asset safety through 24/7 monitoring that operates continuously, even on weekends and public holidays. The storage strategy involves using 100% offline cold wallets, which are removed from online threats. Furthermore, their security architecture incorporates advanced technologies such as Multi-Party Computation (MPC) and Distributed Key Generation (DKG) to enhance privacy and protect against cryptocurrency loss, particularly due to hacking.
Evaluation and Industry Context
Before its selection, Dunamu had distinguished itself during the evaluation phase with an impressive score of 94.73. Competing entities included Korea Digital Asset Custody (K-DAC) with 91.29 points and Hecto Wallet One at 87.27. Despite some skepticism within the industry concerning whether the requirements of the tender favored larger firms, the National Police Agency asserted that the selection process was objective and fair.
Addressing Concerns Over Asset Management
The need for external custody arose amid concerns over the handling of seized cryptocurrencies by law enforcement. This necessity was highlighted after notable lapses, including a case where 22 Bitcoins, valued at approximately 2.1 billion won (about $1.6 million), went missing from police custody, prompting further scrutiny of existing management practices. Similarly, there have been past incidents of lost Bitcoin, raising alarms about the efficacy of internal handling protocols.
With this contract, Dunamu aims to bolster the integrity and security of South Korea’s law enforcement operations related to digital assets, offering a structured approach to handling the custody of seized cryptocurrencies for the upcoming year while adhering to the oversight established by the National Police Agency.
