Korean Crypto Exchange UPbit Lost 342,000 Ether Following Hack

South Korean cryptocurrency exchange UPbit — run by a subsidiary of Korean tech giant Kakao — has been hacked, losing 342,000 Ether (ETH), around $50 million from its hot wallet.

The news has been confirmed by Lee Seok-woo – CEO of Upbit’s operator, Dunamu – via an official statement written on November 27th. The statement explained that the exchange had detected an abnormal transaction from its hot wallet to an unrecognized wallet, which led to an outflow of 342,000 ether (ETH). The exchange did not specify whether it had been hacked.

The statement read as follows:

“At 1:06 PM on November 27, 2019, 342,000 ETH (approximately 58 billion won) were transferred from the Upbit Ethereum Hot Wallet to an unknown wallet. Unknown wallet address is 0xa09871AEadF4994Ca12f5c0b6056BBd1d343c029.”

Following the incident, the exchange apologized to users for any inconveniences caused as the CEO had laid out several measures taken as a precaution. Respectively, the exchange transferred all cryptocurrencies from its hot wallet to a cold wallet and said the loss will be covered by its own corporate assets.

Meanwhile, withdrawals and deposits have already been suspended as a precaution. Later on, Upbit said it will take at least two weeks for deposit and withdrawal services to be back to normal, with Lee Seok-woo promising to inform users as soon as they reopen.

According to Whale Alert – a Twitter service that monitors blockchain transactions – the lost ETH worth $49 million at press time, was sent from Upbit’s wallet to an unknown ethereum address starting with 0xa09871 about 04:00 UTC on Wednesday.

About 30 minutes later, Upbit announced that it had temporarily suspended withdrawals and deposits due to server maintenance. Subsequently, the massive withdrawal alerts did raise suspicions, with several people on social media calling it a hack.

Whale Alert, in fact, noted several withdrawals taking place via UPbit, involving other cryptocurrencies and tokens as well, such as Tron (TRX) and BitTorrent (BTT), amongst others. In fact, more than $100 million worth of multiple cryptocurrencies have been sent out from Upbit today.

However, the exchange stated that only ETH holdings had been affected, and all other recent large-scale transactions were related to the exchange moving assets between hot and storage facilities to prevent further losses.

UPbit’s hack marks this year’s eighth breach, and the total amount stolen from cryptocurrency exchanges to date now stands at around $1.44 billion, according to data.

Meanwhile, Upbit isn’t the only South Korean exchange to have suffered loss. Earlier this year, Bithumb – the second biggest cryptocurrency exchange in South Korea, fell victim to an inside job. According to previous reports, it lost about $13 million in March 2019. In total, the exchange had suffered three major security breaches. Last year, Coinrail was hacked for $40 million.

Maker Upgrade Brings Multi-Collateral to DAI

MakerDAO is upgrading its Maker (MKR) protocol, wherein Multi-Collateral DAI (MCD) will be implemented. While Maker announced the new protocol in October, the update with the upcoming changes to Dai will be live on Nov 18.

Multi-Collateral Option Coming to DAI

MakerDao’s MCD has been proposed to add new assets eligible as collateral for DAI – the system’s dollar-pegged stablecoin. If until now, only Ether (ETH) was being used to issue DAI, with the MCD upgrade Maker (MKR) holders will be able to deposit other cryptoassets as collateral. The governance community is yet to decide which assets will be added, with options between Augur (REP), Basic Attention Token (BAT), DigixDAO (DGD), Golem (GNT), OmiseGO (OMG) and 0x (ZRX).

As per the announcement, the launch of MCD will not require any action from Dai users. Maker stated it will be monitoring the deployment of the MCD closely and will update users if any action is required.

While the new type of DAI will be backed by several types of collateral, the existing Single-Collateral Dai that has been until now backed by ETH, will now be called SAI.

Maker Plans to Phase Out SAI

Maker views the upgraded DAI as the better version that will allow the currency to grow significantly. As a result, the team plans to gradually phase-out SAI. The plan is to Migrate SAI into DAI using Maker’s native migration portal.

DAI is at the heart of the decentralized finance (DeFi) ecosystem and the transition may not be without hiccups, but is certainly viewed by most of the community as a step forward. The new Dai will be available on DeFi protocols like Compound.

MCD system’s launch plans were first revealed by the Maker Foundation’s CEO Rune Christensen in mid-October. The MCD upgrade brings several new features beside the multi-collateral options, along the Dai Savings Rate as well as the re-branded collateral debt positions (CDP) as Vaults.

In early November, the Dai stablecoin hit its 100 million token debt ceiling ahead of the collateral protocol upgrade.

A number of crypto exchanges have already confirmed the switch to MCD including Wyre, Bitcoin Suisse, Bittrex, Kyber, Bamboo Relay, Bitfinex, DeversiFi, Coindirect, GO.exchange and dYdX.

Recently Coinbase, Crypto.com and Kraken also announced their support to trade the token.

Standard Chartered Joins Other Banking Giants at Enterprise Ethereum Alliance

British multinational banking giant Standard Chartered, with over $685 billion in total assets, has just announced its partnership with Enterprise Ethereum Alliance – a member-operated organization that works in the development of blockchain technology for consumers and businesses across the globe.

According to a post on the official website, Standard Chartered announced the partnership with EEA, stating that its main goal is to further develop blockchain technology research and its application in the banking sector. In addition to that, the EEA’s charter has indicated that its intent is to develop open blockchain frameworks to push interoperability between businesses and consumers.

Following the announcement, Standard Chartered joins other industry leaders, which are members of the EEA that wish to strengthen blockchain research and its application in the banking sector. Other banking giants include JP Morgan, ING, Citi, and Spanish bank BBVA. The alliance comprises of around 100 other members, all working towards encouraging the use of Ethereum blockchain as an open-standard to empower enterprises.

The post further reads that the bank strongly believes blockchain to be the best way for central banking and commerce as it would allow transactions to be verified, secure, and processed in real-time. Upon the announcement, Dr. Michael Gorriz – Chief Information Officer at Standard Chartered – stated:

“We are excited to be a part of the EEA and look forward to opportunities where we can collaborate to deepen blockchain research and application in the banking sector.”

Certainly, this is not Standard Chartered’s first venture into blockchain technology. The post has cited a lot of global collaboration projects with fintech firms to explore financial systems’ efficiency improvements, build blockchain-enabled financing solutions for supply chain, and assist cross-border remittance services between Hong Kong and the Philippines using blockchain technology.

The bank is a founding member of the blockchain- based trading platform Voltron and has also recently completed its first international letter of credit (LC) transaction on the platform for the oil industry.

The British bank has also invested in blockchain payments firm Ripple and is currently working with China-based Linklogis to develop a blockchain-based supply chain financing solutions. In addition to that, the bank is currently working with the Central Bank of Thailand to aid them in creating a CBDC, as well as backing the Monetary Authority of Singapore’ s initiative to explore DLT use for payment settlements.

UNICEF Starts Initiative to Accept Cryptocurrency Donations

UNICEF announced a Cryptocurrency Fund that will receive contributions in cryptocurrency and grant out in the same digital currency, this being a first for United Nations organizations.

Unicef’s new Cryptocurrency Fund is the most recent effort by aid organisations to try to incorporate digital currencies into their operating model. Cryptocurrencies have the potential to transform charitable giving and increase financial transparency.

This new type of decentralized value transfers offers non-profit organisations the advantage of avoiding extra transaction costs and middlemen that are usually required to move large amounts of money overseas quickly. While these features are useful in a wide array of industries, it would appear that UNICEF is willing to apply the new technology.

Christopher Fabian, principal advisor at UNICEF Innovation, stated the initiative would prepare the organization for the future while also maintaining existing donor systems.

“We see this as a piece of learning that we need to go through to prepare for the next decade,” he said.

The UNICEF Cryptocurrency Fund is a new pilot developed to allow the agency to accept cryptocurrencies, which initially includes Bitcoin (BTC) and Ethereum (ETH). For aid and charity organizations, cryptocurrencies make tracking donations easier, and have the potential to allow donors to see how their money is used.

The organization already started receiving cryptocurrency donations following the launch of the fund, with the first one coming from the Ethereum Foundation itself. The Foundation donated 1 BTC and 10,000 ETH.

“The Ethereum Foundation is excited to demonstrate the power of what Ethereum and blockchain technology can do for communities around the world. Together with UNICEF, we’re taking action with the Cryptofund to improve access to basic needs, rights, and resources,” said Aya Miyaguchi, Executive Director of the Ethereum Foundation.

Furthermore, the new initiative is already discussed with agencies from four nations, including UNICEF USA, UNICEF Australia, UNICEF New Zealand, and UNICEF France.

The importance of aid organizations like UN around the world is growing for an array of countries. As a dispenser of aid, the acceptance of cryptocurrency will certainly be helpful in becoming more transparent and attract more contributions.

Alongside UNICEF’s work with blockchain technology, the UN secretary-general, Antonio Guterres, also published a strategic plan which shows how the UN might become a leader in solving world problems through the use of new technologies. Part of the plan includes the creation of affordable access to financial infrastructure and digital networks for every adult in the world by 2030.

Morningstar to Build Evaluation System Underpinned by Blockchain Technology

Financial services Morningstar Credit Ratings has announced plans to implement an evaluation system for debt securities issued as tokens on a blockchain, aiming to make the emerging asset class more credible for investors.

According to the report, the new rating system for rating bonds will be implemented directly on the Ethereum blockchain and eventually on other blockchains as well by using a technology called an oracle. Oracles move trusted data, like a Morningstar rating for instance, onto a blockchain in a secure way that ensures the rating isn’t doctored, allowing it to be used as a term in a smart contract.

The oracle relies on third-party providers to convert business debt into tokens similar to Bitcoin. The securitized tokens are then dispersed to investors via a smart contract, with the terms of the investment, the public addresses of the investors and the Morningstar rating all operating on the blockchain.

The new evaluation system is set to give publicly available ratings of one to five stars to crypto assets, whilst the company’s premium custom service will utilize its internal modeling to help clients evaluate and assess given investments. The company further added that the public ratings could be launched later this year. Their premium service, on the other hand, will be made available by the end of 2020.

Chief Operating Officer at Morningstar Credit Ratings, Michael Brawer, has stated in an interview that this evaluation system could allow and facilitate the shift of the $117 trillion debt securities industry to a decentralized financial network.

Seeing as the industry is overseen and governed by custodians and trustees, the availability of an evaluation system that allows customers to assess investments and make decisions based on that, could enable billions of dollars investment to enter the crypto space as the new rating services can make the new asset class more credible.

Brawer further stated:

“We’re looking to see how we can also provide credit opinions, whether it’s a credit rating or different types of credit data and credit analytics that accompany those debt instruments, and we’re also looking to provide our services on a blockchain.”

Brawer explained that the company had seen the demand for rating services within the crypto space when it was approached by a range of investors who issue and securitize debt securities, including small business loans and home equities on blockchain.

“The objective would ultimately be to allow investors in a digital debt security to be able to run an independent, third-party model and see the results of that model on the blockchain,” says Brawer.

According to the report, Morningstar’s rating services covers both government and corporate bonds,whilst its blockchain products are still limited to structured debt instruments.

The company offers both security and convenience through their services, and investors can directly connect lenders and borrowers, as well as eliminate custodians and trustees in a transaction and saving as much as 500 basis points in fees.

At the moment, due to the stringent regulatory framework imposed by the US Securities and Exchange Commission (SEC), the company could end up having to change their blockchain methodology.

Meanwhile, there are a few potential candidates who would partner with Morningstar to launch the product, which includes fintech startup Figure, alternative investment company Cadence and DeFi platform Polymath.