Deribit Exchange Hacked For $28M, Pauses Withdrawals

NEW DELHI (CoinChapter.com) — Cryptocurrency options exchange Deribit reported that hackers have attacked one of its hot wallets and stole $28 million. The incident occurred on Nov 1.

The company assured its clients that their funds were secure and the exchange would cover any loss through the company reserves. In detail, a hot wallet refers to a cryptocurrency wallet that users frequently access and typically lacks the protection that cold wallets enjoy.

Deribit Exchange Halts Withdrawals

Deribit noted that the hacker did not compromise its cold wallets or client assets.

It’s company procedure to keep 99% of our user funds in cold storage to limit the impact of these type of events.

Deribit said in a tweet

Additionally, the exchange shared that the hack was isolated and confined to its Bitcoin (BTC), Ethereum (ETH), and USDC hot wallets. Deribit also halted all withdrawals, including third-party custodians Copper Clearloop and Cobo.

The withdrawals would resume once ongoing security checks are complete, Deribit assured customers.

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Meanwhile, users’ deposits would go through pending the required number of confirmations. However, the exchange has raised the minimum number of confirmations at the moment, which might cause a delay in transaction times.

October The Worst Month Ever For Crypto Hacks

2022 has already seen hackers steal over $3 billion from investors across nearly 125 hacks, with nearly two months remaining.

Moreover, Oct has become the biggest month in the biggest year ever for hacking activity. In an Oct 2022 report, analytics firm Chainalysis highlighted that hackers stole over $718 million in the first two weeks of the month from several DeFi protocols.

With two months to go, 2022 is on track to surpass 2021 “as the biggest year for hacking on record,” the Chainalysis report noted.

To recap, attackers gained over $3.2 billion in 2021, with 2022 witnessing massive hacks like the $325 million exploit of Wormhole and the $625 million hack of Axie Infinity’s Ronin bridge.

Hacks erode investors’ confidence in the nascent DeFi sector, with little to no benchmarks in place for security standards. Moreover, the news might add to the bearish cues against the cryptocurrency markets, such as global macroeconomic conditions and the geopolitical tensions in Europe.

While you are here, this is why XRP could be the next crypto to record a massive rally.