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Over the weekend, South Korean Karaoke service SOMESING suffered a hack that stole hundreds of millions of SSX tokens. This hack has made crypto exchanges in South Korea alert users and take provisionary actions to minimize investors’ risks.
Upbit Alerts Over Security Risks
On January 29, a press release from the largest South Korean crypto exchange Upbit alerted its users of the SSX tokens hack and the following measures to be taken. The exchange warned the community about the potential security risks and the price volatility the token has faced since the attack.
This announcement came after several crypto exchanges, including Bithumb and Coinone, followed SOMESING’s request to suspend SSX token deposits and withdrawals from crypto exchanges.
The press release stated that Upbit has also suspended deposits and withdrawals of the SSX token following the Foundation’s request and explained that the decision is based on the digital asset becoming a ‘cautionary asset’ according to the Digital Asset Exchange Association (DAXA) designation to protect investors.
As the report details, the ‘cautionary asset’ designation is founded on the security issue that the suspicious movements from SOMESING Foundation wallets represent, as well as the change in distribution volume compared to the distribution plan previously submitted by the foundation.
Consequently, Upbit also labeled the SSX token as a ‘cautionary asset’ and has designated a review period from January 19, 2024, until February 14, 2024, to examine the SSX token. Upbit will conduct a detailed review of the digital asset during this period to determine whether to extend or lift the ‘cautionary asset’ designation or terminate the transaction support.
730 Million Tokens Withdrawn To An Unknown Crypto Wallet
On January 27, the decentralized blockchain music platform SOMESING notified its community and holders and revealed the details of the hack that occurred in the early hours of that day.
The hack saw 730 million SSX tokens, worth approximately $11 million at the time, withdrawn to unknown wallets. The foundation detailed on its Medium post that 504 million of the stolen SSX tokens were undistributed tokens originally planned to be circulated by the end of 2025.
The Foundation held the other 226 million withdrawn tokens for their circulation supply plans, and as a result, 489 million SSX tokens are over-circulating.
SOMESING’s investigation determined that no member of its team seemed to be involved in the attack, as the methods used suggest that it was most likely conducted by a professional hacker or group of hackers specialized in targeting digital assets.
As part of the emergency measures taken, the Foundation informed that the case was immediately reported to the Cyber Investigation Unit of the National Police Agency, and the incident would also be reported to Interpol.
Additionally, SOMESING urgently requested that domestic and foreign exchanges temporarily suspend deposits and withdrawals of the SSX token where it was listed to prevent further damage to users.
Lastly, the Foundation detailed its plan to track the transaction history of the stolen SSX tokens in collaboration with the Klaytn Foundation and Official Interpol-partner cyber security company Uppsala Security. The goal is to identify the final destination of the stolen funds and identify the hacker’s wallet to potentially freeze the seized assets and unveil the hacker’s identity to take further legal action.
According to CoinGecko data, the SSX token traded around the $0,017-$0,018 range before the hack, falling to $0,015 in the following hours. At writing time, the SSX token trades at $0.01413, a 12.4% price drop in the last 24 hours.
Featured image from Unsplash.com, Chart from Tradingview.com
