GOPAX Suspends Trading and Withdrawals Following Hack Threat, Shifts Assets to Cold Storage

GOPAX Suspends Trading Amid Cyber Threats

Amid rising cyber threats, South Korea's cryptocurrency exchange GOPAX has decided to suspend all trading, deposits, and standard withdrawals. This precautionary measure took effect early on Friday after the platform received a threatening email concerning a potential hack, as reported by Kyunghyang Shinmun, a local newspaper. Although there has been no evidence of a security breach or attempted theft as of the time of the announcement, a spokesperson for GOPAX emphasized the need for caution.

Details of the Suspension

The suspension began at 5:55 a.m. UTC for deposits and standard withdrawals, with trading ceasing shortly after at 6:53 a.m. All unfulfilled orders were canceled as part of the emergency measures. To enhance security, GOPAX has stated its intention to transfer all cryptocurrency assets to offline wallets, a move influenced by recent high-profile cyber incidents that have affected financial institutions worldwide. This plan aligns with recommendations from financial authorities aimed at bolstering the security of digital asset holdings.

Customer Options and Regulatory Context

Customers still have the option to make manual withdrawal requests through GOPAX’s support center. However, the exchange cautioned that these requests may be subject to delays due to the manual processing involved. This announcement comes on the heels of a reminder from South Korea's Financial Services Commission (FSC) to local exchanges, urging them to strengthen their cold wallet reserves in light of a staggering $6.3 billion theft from Binance.

Regulatory requirements dictate that at least 80% of customer assets must be stored in cold wallets, a benchmark GOPAX has surpassed, with a recorded 80.54% of user assets offline at the end of September. Unfortunately, the FSC's report on cybersecurity lapses identified not only GOPAX's operator, Streami, but also other exchanges including Prabang, as having faced security issues, leading to plans for stricter oversight of cybersecurity practices.

Related Incidents and Evolving Regulations

In a related incident, Prabang recently suspended its own services after detecting unusual withdrawal activity from its hot wallet, resulting in losses estimated at around 100 million won (approximately $70,000). The company announced that it would compensate affected clients using its funds.

Given these unsettling developments, the broader regulatory landscape in South Korea is evolving, with discussions around delays in cryptocurrency taxation and a target date for implementation now pushed to 2029. Cointelegraph attempted to reach GOPAX for further clarification but had not received a response at the time of publication.