The handling of frozen assets linked to the Upbit exchange hack has raised questions about how major global crypto exchanges respond to emergency requests from law enforcement.
A recent clash between law enforcement expectations and exchange response protocols has placed Binance, one of the world’s largest cryptocurrency trading platforms, under the spotlight. The controversy centers on how Binance handled the freezing of assets tied to a high-profile hack of Upbit, one of South Korea’s leading crypto exchanges, and whether its actions were timely and sufficient.
On November 27, South Korean police, in coordination with Upbit, asked Binance to freeze approximately 470 million Korean won worth of Solana-based tokens that had been traced to the security breach.
However, the exchange ultimately froze only about 17 % of that total—equivalent to roughly $55,000 USD—and did so after a delay of around 15 hours, citing the need for further verification before taking broader action.
Response and criticism amid a high-profile security breach
The partial response has triggered debate across the crypto industry about how quickly and comprehensively centralized exchanges should comply with law enforcement requests during active security incidents. Analysts and blockchain researchers argue that swift, comprehensive freezing measures are crucial to limit losses and prevent stolen crypto from being dispersed through multiple wallets and platforms, especially in cases where attackers utilize complex transfer strategies.
Some have proposed establishing a global emergency cooperation framework for exchanges to act more immediately in such scenarios.
Upbit has stated that it is actively collaborating with authorities to identify the perpetrators responsible for the hack and has urged major exchanges to freeze any assets traced to wallets linked to the incident. Binance responded by emphasizing its commitment to cooperating with relevant law enforcement agencies through official channels, while refraining from commenting on specific aspects of ongoing investigations.
The unfolding situation highlights a broader challenge for centralized cryptocurrency platforms: balancing internal verification processes and risk management policies with urgent law enforcement actions, especially in an environment where digital assets can be rapidly moved across networks and borders.
