Trading screens at South Korean cryptocurrency exchange Gopax were unavailable on the 8th. Gopax suspended cryptocurrency deposits, withdrawals and trading services on the afternoon of the 6th as part of enhanced security measures to prevent hacking damage.Questions are mounting over why South Korean cryptocurrency exchange Gopax suspended deposits, withdrawals and trading in quick succession immediately after receiving hacking threats. The company says the move was a preventive step to protect user assets, but industry watchers call it unusual for an exchange to effectively halt operations over threats alone. Some in the industry are raising concerns about the security capabilities of Gopax, whose largest shareholder is Binance, and even the possibility that some administrator accounts were compromised.A senior official at the financial supervisory authorities said on the 8th that Gopax is believed to have received about two threatening emails. “Given the hacking damage at its largest shareholder Binance, a string of recent incidents and its relatively weak security capabilities, the company likely reported to regulators and then suspended services on its own,” the official said.Gopax announced a partial service suspension at 2:49 p.m. on the 6th and progressively halted cryptocurrency deposits, withdrawals and trading. The company said the measures were intended to strengthen security after it received the threatening emails, including moving all custodied assets to cold wallets that are disconnected from the internet. Gopax held 80.54% of assets in cold wallets, the lowest level among South Korea’s five largest exchanges.Market participants are increasingly puzzled that the exchange effectively suspended operations simply because it received threatening emails. “Anyone can send a threatening email, and exchanges face such threats routinely, so I think there is a possibility that personal information or assets were actually leaked,” said Hwang Seok-jin, a professor at Dongguk University’s Graduate School of Information Security. “The fact that trading was halted as well can be interpreted as a measure taken with the possibility of an internal system breach in mind.”The timeline for restoring services also remains unclear. Gopax has said it will resume services once the safety of its security patches is confirmed, but it has not provided a specific date. The company is accepting separate withdrawal requests through its customer support center, but withdrawals are currently allowed only to supported personal wallets, with direct transfers to other exchanges restricted.Gopax had earlier disclosed that the personal information of nine people, including customers and current and former employees, was leaked starting in early September, with an additional leak occurring last month. Binance, which holds about 67% of Gopax, also suffered the largest cryptocurrency hacking loss on record about a week before the service suspension.Criticism of Gopax’s security systems and incident response has persisted. During the earlier personal information leaks, the company drew criticism for belatedly posting details of the damage and an apology. Gopax is also the only one among South Korea’s five largest exchanges without Information Security Management System-Personal certification (ISMS-P).User anxiety is also growing. One user wrote in an online post that removing the trading window and abruptly halting coin deposits and withdrawals because of a hacking threat seriously damages trust in the exchange. Another user said it was frustrating that no timeline for resuming services had been given even though access had been blocked since Friday afternoon.With security incidents piling up at domestic cryptocurrency exchanges, financial regulators are also responding. The Financial Supervisory Service plans to convene chief information security officers from cryptocurrency exchanges and custody firms on the 19th for a meeting on hacking incidents in the sector.
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