Hackers steal $28 million from Deribit hot wallets

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Key Takeaways:

  • A hot wallet hack caused Deribit, a cryptocurrency derivatives exchange, to lose $28 million.
  • During the theft, attackers gained access to Deribit’s hot wallets for Bitcoin, Ethereum, and USDC.

Crypto derivatives exchange  Deribit lost $28 million after funds from its hot wallet was stolen, but user funds are protected and the damage will be covered by company reserves. Deribit, which was founded in 2016, primarily serves institutional investors.

A few hours later, the company announced the mishap on its official Twitter account. The company claims to be currently conducting underway security measures and has brought its withdrawals to a halt, including those from third-party custodians Copper, Clearloop, and Cobo, until it is certain the system is secure to reinstate.

None of the cold storage addresses, Fireblocks, or client assets are impacted. To minimise the consequences of these kinds of events, it is company policy to keep 99% of our users’ funds in cold storage. According to the business, the hack is restricted to Deribit’s hot wallets for BTC, ETH, and USDC.

A third-party service known as Fireblocks assists institutional players with crypto custody, settlement, and transfers.

Deposits that have already been sent will still be processed and credited to accounts once the necessary number of verifications has been received. The exchange stated that the insurance fund would be unaffected and that the damage would be covered by company reserves. Deribit remains fiscally responsible, and its current operations will unlikely be affected.

The hack is the latest setback for the exchange, which was already affected by the recent liquidation of Three Arrows Capital (3AC) positions due to the latter’s bankruptcy after failing to meet margin requirements.

Hot wallets are more susceptible to cyber-attacks because they are connected to the internet and are a part of cryptocurrency exchanges. The shocking news of another hot wallet being hindered first surfaced in 2022. 

Users were made aware of the compromised LCX hot wallet by PeckShield Inc and estimated that the total loss was of  $6.8M. However, the exchange’s hardware wallet was the only thing that was lost, according to the platform, which also affirmed that none of the user’s funds were damaged.

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Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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