Upbit Initiates Trading Review for EGLD Token
The South Korean cryptocurrency exchange Upbit has officially initiated a trading review for MultiversX’s EGLD token, following a recent security breach within its mainnet. This warning was issued on September 21, 2023, after Upbit identified unresolved security vulnerabilities that might have led to potential financial losses for users associated with EGLD trading pairs, including EGLD/KRW, EGLD/BTC, and EGLD/USDT.
Service Suspension and Security Measures
On September 19, Upbit had already halted all EGLD deposit and withdrawal activities at 5:47 PM KST, and has indicated that any resumption of services will prioritize withdrawals first. Another update on deposit functionalities will come only after the conclusion of the ongoing trading review.
This cautionary measure by Upbit comes in light of an attempted exploit targeting a virtual machine-level atomicity flaw in the MultiversX mainnet. Initially, the project addressed this issue on September 19, stating their commitment to user safety and the resilience of the network without confirming any financial losses. However, subsequent reports clarified that the attempted exploit led to invalid on-chain state changes, necessitating a temporary halt in block production while developers worked on a fix.
To mitigate the risks associated with these state changes, MultiversX has developed a correction method tested through a shadow fork, designed to replicate live network conditions without immediate impacts on users. As the situation progresses, the team emphasizes that any software updates will be contingent upon successful testing and collaboration with validators and exchange partners.
Impact on Other Exchanges and EGLD Value
The seriousness of the incident has not gone unnoticed by other exchanges. For example, Bithumb suspended its EGLD deposit and withdrawal transactions on the same day that Upbit took action, while Kraken opted to restrict trading on EGLD pairs to a cancel-only mode. Coinbase also faced challenges, reporting delays with EGLD transactions beginning September 19, but confirmed their buying, selling, and fiat options remained unaffected.
The repercussions of the exploit attempt seemed to immediately affect the EGLD token value, which fell to $3.78 by September 20, a drop of approximately 8.7% from before the incident. Interestingly, the trading volume surged to approximately $10.18 million following the incidents, compared to around $3.35 million just days earlier on September 18.
User Caution and Future Plans
MultiversX has cautioned its users against processing EGLD or ESDT tokens across exchanges or utilizing cross-chain bridges until the situation normalizes and the project provides an all-clear announcement. According to Upbit’s trading-support termination policy, the exchange’s review will determine whether trading support for EGLD will continue or be suspended based on whether the security issues are effectively resolved during this review period, set to last until the fourth week of October.
EGLD’s recent issues follow shortly after the implementation of its Supernova mainnet upgrade aimed at enhancing transaction speeds, thus adding to the complexity of the current situation. However, there has not yet been a direct connection made between this upgrade and the mainnet exploit attempt. MultiversX has mentioned that their engineers are actively preparing a recovery procedure designed to rectify any invalid state changes while safeguarding the integrity of legitimate transaction history.
Going forward, MultiversX plans to release a comprehensive technical incident report once the investigations conclude. Until then, Upbit and other exchanges will maintain their EGLD transfer suspensions to ensure user protection and network stability.
