Exploit Impact and Investigation
Substantial Token Loss
Somesing, a popular blockchain-based social karaoke platform in South Korea, faces a significant setback as it falls victim to an exploit resulting in the loss of approximately $11.58 million. The platform discloses that 730 million of its native token SSX has been compromised.
The attack specifically targeted 504 million undistributed SSX tokens, intended for circulation by 2025, and 226 million SSX tokens held by the Somesing foundation. Somesing clarifies that the hack was not carried out by any team member and suspects professional hackers specializing in virtual asset targeting.
Legal Action and Authorities’ Involvement
Somesing promptly reported the incident to the National Police Agency and plans to involve Interpol in the investigation. The company collaborates with the Klaytn Foundation and Uppsala Security to identify the attackers, with intentions to freeze stolen assets and pursue legal action once perpetrators are identified.
Cryptocurrency Exchange Response
Temporary Suspension by Major Exchanges
In response to the security breach, major South Korean cryptocurrency exchanges, including Upbit, Bithumb, and Coinone, temporarily suspend the deposit and withdrawal of SSX tokens. Users are cautioned about potential price volatility resulting from the exploit.
Varied Responses Among Exchanges
While South Korean exchanges issue warnings, HTX and Gate.io, where the token is also listed, refrain from issuing similar cautionary statements. The diverse responses highlight the varying approaches of exchanges to mitigate potential risks associated with the exploit.
Somesing’s Operational Model and Web3 Incentives
Klaytn Blockchain Operation
Somesing operates on the Klaytn blockchain, employing a unique model that incentivizes users who upload karaoke recordings with SSX tokens. Funded by user donations, singers receive 60% of donated tokens, Somesing retains 20%, and the remainder supports copyright fees and community maintenance.
Ongoing Cybersecurity Challenges
The incident underscores the persistent challenge of cybersecurity within the cryptocurrency industry. It follows a recent $81.5 million hack on the Klaytn-linked protocol Orbit Bridge, emphasizing the need for continuous vigilance in safeguarding digital assets.
South Korean Exchanges’ Efforts Against Crypto Scams
Romance Scam Prevention
South Korean crypto exchanges actively combat scams, with recent reports revealing over $82 million blocked in transactions linked to romance scams. Coinone claims to have halted over $2.6 million in romance scam-related trades, employing detection systems and 24-hour monitoring to protect users.
Regulatory Warnings on Social Media Scams
The Financial Supervisory Service (FSS) issues warnings about the rise of crypto-related scams on social media sites. Cautioning against romance scammers and unsolicited investment advice, the regulator emphasizes public awareness and vigilance in dealing with crypto-related interactions.