South Korean cryptocurrency exchange GDAC was hacked for almost $13 million on April 9, 2023.
This is the latest in a series of cryptocurrency platform hacks over the past 15-18 months, which are becoming increasingly common as more people invest in cryptocurrencies.
Key takeaways
- South Korean exchange GDAC reports $13M crypto theft
- Nearly 23% of GDAC’s total custodial assets were stolen
- Hackers targeted Bitcoin, Ethereum, Wemix, and Tether
- GDAC is working with institutions to recover funds
- CEO prioritizes investor protection and asset security
- Other exchanges urged to report any deposit they receive from the hackers
- This is one of the latest cryptocurrency platform hacks in the past 15-18 months.
What is a Cryptocurrency Exchange?
A cryptocurrency exchange is an online platform where people can buy and sell cryptocurrencies.
Just like a stock exchange, the price of each cryptocurrency is determined by supply and demand. Cryptocurrency exchanges make money by charging a fee for each trade.
What Happened at GDAC?
According to a GDAC support page, the hackers transferred approximately 23% of GDAC’s total custodial assets from the exchange’s hot wallet to an unidentified wallet, which included nearly $13,000,000 in Bitcoin (BTC), Ethereum (ETH), Wemix (WEMIX), and Tether (USDT).
The hackers were able to access GDAC’s hot wallet, which is the wallet that holds cryptocurrencies that are actively being traded.
How Did the Hackers Steal the Cryptocurrencies?
The exact method that the hackers used to gain access to GDAC’s hot wallet is still unknown.
However, it is likely that they used a combination of phishing emails and other social engineering techniques to trick GDAC employees into revealing their login credentials.
Once the hackers had access to GDAC’s hot wallet, they were able to transfer the cryptocurrencies to an unidentified wallet.
What Happens Next?
GDAC is currently working with several institutions to recover the funds and has notified authorities about the incident.
The exchange has also suspended its wallet system and related servers and reported the event to the Korean Internet Promotion Agency (KISA) and the FIU.
GDAC CEO Jindhak Han Seung-hwan has stated that investor protection is the exchange’s top priority, and it will continue to work to secure the safe withdrawal of its users’ assets.
GDAC has also urged other exchanges to immediately stop depositing funds at the address where the excess withdrawal was made public, and to report any deposit they receive as an “incident report.”
Customers with concerns regarding the withdrawal transaction are also urged to report it to GDAC.
How to Protect Your Cryptocurrencies
Cryptocurrencies are a highly speculative investment, and their value can be extremely volatile.
If you do choose to invest in cryptocurrencies, there are several things you can do to protect your assets:
#1. Use a Cold Wallet
A cold wallet is a type of cryptocurrency wallet that stores your cryptocurrencies offline. This makes them much less vulnerable to hacking attempts, as they are not connected to the internet.
#2. Use Two-Factor Authentication
Two-factor authentication is an additional layer of security that requires a second form of authentication in addition to your password. This can be a fingerprint scan, a code sent to your phone, or a security token.
#3. Choose a Reputable Exchange
Not all cryptocurrency exchanges are created equal. Some have better security protocols than others. Before choosing an exchange, do your research to ensure that it has a good reputation and a strong security track record.
#4. Keep Your Passwords Safe
Your password is the key to your cryptocurrency wallet. If someone else gains access to your password, they can steal all of your cryptocurrencies. Keep your passwords safe and never share them with anyone.
#5. Don’t Keep All of Your Cryptocurrencies in One Place
Just like with any investment, it’s important to diversify your portfolio. Don’t keep all of your cryptocurrencies in one wallet or exchange.
Spread them out over multiple wallets and exchanges to reduce the risk of losing everything in the event of a hack.
To conclude
The recent GDAC hack serves as a reminder of the risks associated with investing in cryptocurrencies and the importance of taking steps to protect your assets.
By using a cold wallet, enabling two-factor authentication, choosing a reputable exchange, keeping your passwords safe, and diversifying your portfolio, you can reduce the risk of losing your cryptocurrencies to hackers.
What steps have you taken to protect your cryptocurrencies? Have you ever been a victim of a cryptocurrency hack? Share your thoughts and experiences in the comments below.
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