Binance under Scrutiny over Response to South Korean Police Request in Upbit Breach Case

South Korea's authorities are re-examining how overseas cryptocurrency platforms respond to urgent law enforcement requests following new details emerging about Binance's handling of a police freeze request linked to a security breach at Upbit. The case has become a benchmark for the speed with which stolen digital assets can be contained once they leave domestic exchanges and move across borders.

Cooperation under Scrutiny

While cooperation between exchanges and regulators is often described as routine, the Upbit incident highlights how verification processes and response times can significantly impact the outcome of active investigations. The situation has also reignited attention on whether existing cross-border coordination mechanisms are sufficient when hacks involve large sums and fast-moving assets.

The Incident

According to South Korean broadcaster KBS, police investigating the Upbit breach asked Binance to freeze Solana tokens worth approximately 470 million Korean won (around $370,000) on November 27. Investigators believed the funds were linked to wallets connected to the incident at Upbit, one of the country's largest cryptocurrency exchanges.

Delays and Discrepancies

KBS reported that Binance ultimately froze around $55,000 (equivalent to about 17% of the amount requested) after a delay of approximately 15 hours. The freeze came after Binance reportedly told authorities that additional verification was required before it could act on the full request.

The Consequences

The gap between the amount requested and the amount frozen has become central to questions about enforcement speed. This discrepancy raises concerns about the effectiveness of current mechanisms in swiftly containing losses during hacking incidents. The police request followed unauthorized withdrawals of Solana-based assets from Upbit valued at roughly $36 million.

The Need for Change

As part of its response, Upbit has been tracking wallet movements and alerting major global exchanges to assets suspected of being linked to the breach. The case illustrates how quickly stolen crypto can be distributed, making early intervention critical once an incident is detected.

The incident has drawn attention to structural issues in global crypto enforcement. KBS cited experts highlighting that rapid initial freezes can limit losses in hacking cases, while delays can allow assets to be moved or laundered further. Concerns have also been raised about exchanges citing legal or litigation risks when responding cautiously to foreign law enforcement requests.

Proposals for Change

The discussion has included proposals for tighter coordination, such as direct emergency communication channels between major exchanges with the authority to enact temporary freezes while verification is completed. These ideas reflect ongoing debates about balancing due process with the need for swift containment.