Upbit Hacker Evades Railgun’s Checks to Launder $36M Stolen in Exploit – Here’s How
- How Did the Upbit Hacker Dodge Railgun’s Defenses?
- Why Railgun’s Zero-Knowledge Proofs Failed This Time
- The North Korean Connection: A Familiar Pattern
- Railgun’s Rising Star in DeFi Privacy
- Privacy Tools: Double-Edged Sword for Crypto
- FAQs: The Upbit Hack and Railgun’s Role
In a brazen move, the hacker behind the $36M Upbit exploit has bypassed Railgun’s privacy protocols to launder stolen funds. Despite Railgun’s zero-knowledge proof checks, the attacker’s addresses slipped through, mixing over 410 ETH. The incident highlights vulnerabilities in even the most advanced privacy tools, with ties to North Korean hacking patterns. Meanwhile, Railgun’s popularity surges in DeFi, hitting $95M in TVL. Here’s the full breakdown.
How Did the Upbit Hacker Dodge Railgun’s Defenses?
The Upbit attacker exploited a critical gap in Railgun’s real-time monitoring. While Railgun cross-references wallets against updated threat databases, the hacker’s rapid wallet shuffling—creating new addresses within hours of the exploit—left the system playing catch-up. "The last intercepted wallet laundered 410 ETH," notes BTCC analyst Mark Liu, "but by then, the trail was already fragmented across DEXs and intermediary wallets."
Why Railgun’s Zero-Knowledge Proofs Failed This Time
Railgun’s privacy tech typically verifies fund origins without exposing transaction details. But in this case, the hacker’s use of fresh Solana-to-Ethereum bridges and instant DEX swaps created a data lag. By the time Railgun flagged the initial wallets, the funds had morphed into "clean" USDC via three hops: SOL → USDC → ETH. "It’s like trying to track a chameleon in a hall of mirrors," quips an anonymous DeFi sleuth.
The North Korean Connection: A Familiar Pattern
The ETH mixing strategy mirrors tactics attributed to Lazarus Group. Chainalysis data shows 73% of hacked funds in 2025 followed similar cross-chain paths before landing in privacy pools. Upbit’s post-mortem revealed weak wallet encryption enabled the breach—a $36M lesson in key management.
Railgun’s Rising Star in DeFi Privacy
Despite this incident, Railgun’s TVL ballooned to $95M in November 2025, with RAIL tokens up 200% quarterly. Vitalik Buterin’s endorsement boosted adoption among legit users: "For every hacker, there are 100 traders just wanting OTC privacy," says BTCC’s head of research.
| Metric | Value | Source |
|---|---|---|
| Stolen ETH Laundered | 410 ETH ($1.6M) | Etherscan |
| Railgun Q3 Fees | $1.31M | CoinMarketCap |
| RAIL Token Price | $3.26 (+214%) | TradingView |
Privacy Tools: Double-Edged Sword for Crypto
While Railgun maintains it’s "90% used for legal privacy," this exploit shows how even robust systems can be gamed. The protocol has since updated its threat feeds—but as one white-hat hacker jokes, "It’s an arms race where the criminals get free R&D from our GitHub commits."
FAQs: The Upbit Hack and Railgun’s Role
How much was stolen in the Upbit hack?
The attacker drained $36 million, with $30 million in solana assets liquidated immediately.
Why didn’t Railgun block the hacker’s transactions?
Time lag: The hacker used wallets created post-exploit that weren’t yet in Railgun’s threat database.
Is Railgun primarily used by criminals?
No—its $95M TVL suggests mainstream DeFi users dominate, though high-profile exploits attract attention.
