South Korean cryptocurrency exchange Upbit lifted the trading warning on Taiko (TAIKO) on July 24, following a thorough review of the Ethereum layer-2 project's security incident that occurred in June.
The exchange had flagged TAIKO on June 22 after detecting a security breach involving Taiko’s bridge and chain-state verification systems, prompting a temporary halt on deposits to shield users from potential losses. Deposits remained suspended while Upbit assessed the project's response and remedial steps.
After a 32-day evaluation, Upbit concluded that Taiko’s explanation and tightened security protocols effectively addressed the vulnerabilities that led to the exploit. As a result, deposits for TAIKO will gradually resume across its KRW, BTC, and USDT trading pairs, with backlogged transfers being processed in sequence.
The June exploit took advantage of flaws in Taiko’s ERC20 vault on Ethereum, allowing unauthorized withdrawals estimated between $1 million and $1.7 million. The attack forced Taiko to pause new block production and urge users and exchanges to suspend interactions temporarily. Security analyses revealed issues with source-signal proof checks that let attackers bypass verification.
Despite the delisting fears that affected TAIKO’s market price, the lifting of the warning restored some investor confidence, though Upbit cautioned about possible price swings once deposits reopen due to discrepancies with overseas exchanges.
