Upbit’s stolen ETHs incident yesterday to drive up demand for ETH to fulfill their obligation to the customers.

l Yesterday’s Story

l Situation in Upbit

l Buy ETH

Hacking or inside job?

Yesterday, Upbit which was initially launched as a partnership between Bittrex and South Korean app maker Dunamu, backed messaging giant Kakao reported that 342,000 ETHs were stolen from the hot wallet into an unknown wallet address. However, there was some conflict reports and a possibility linking this to an inside job[3], according to Cointelegraph,

“The ‘hacker’ timed when Upbit was making crypto transfers to its cold wallet (other alts like TRON, etc.). Hence, I think the probability of it being an inside job is higher than external breach.”

Cryptoassets inventory situation in Upbit

The CEO of Upbit, Sirgoo Lee, was quick to make a statement saying that there was a theft of 342,000 ETHs into an unknown address and they have secured other deposits into their cold wallets. He was also quick to announce that they will make up for the loss of ETH so all the customers deposits will be secure.

According to Upbit’s notice in 1st of Oct, 2019, Upbit securely holds 103.92% of the cryptoassets payable to customers and it also stores 131.96%% fiat payable to customers. If the notice were true, it would mean that Upbit has enough reserves to make up the loss of the theft yesterday, however, according to the financial reports of 31st of December, 2018, Upbit’s holding in ETH was only about 2,000. Which is not enough to cover up for the amount stolen.

Demand for ETH to be driven by buying from Upbit

Given the positive track record of Upbit’s commitments to prior notices and their capability to be able to make up for the loss of the theft yesterday, Hanbitco predicts that such low inventory from Upbit will drive up demand for ETH as they need to stack up their reserve to match their commitment within two weeks.