World’s Biggest Options Exchange, Deribit, Loses $28 Million In Hot Wallet Hack, Pauses Withdrawals

Deribit, the largest cryptocurrency options exchange, has paused all withdrawals to third-party custodians after losing $28 million worth of crypto in a hot wallet hack. 

Deribit’s Hot Wallet Hacked for $28 Million

Deribit, a crypto exchange focusing on options trading, has announced via its official Twitter handle that the platform’s hot wallet was compromised by a hack some time before midnight on November 1, 2022.

According to the announcement, $28 million worth of cryptocurrencies was stolen during the exploit. To minimize the damage, Deribit has halted all withdrawals on the platform as part of a security check.

Deribit announced that withdrawals, including custodians Copper Clearloop and Cobo, will be halted until the platform is 100% confident about its security following the hack.

Cold Wallets were Unaffected 

Deribit announced that “client assets, Fireblocks or any of the cold storage addresses are not affected.” Since the exchange keeps 99% of user funds in cold storage, the impact of the hack was limited.

According to Deribit, the exchange’s insurance fund will not be affected by the hack. The company also announced that they will cover the loss and declared that “Deribit remains in a financially sound position.”

On the Flipside

  • Despite withdrawals being paused, Deribit deposits are still processed after the required number of confirmations.

Why You Should Care

The hack highlights the increasing attacks on crypto platforms. However, Deribit said they were able to limit the loss of user funds due to their hot wallet policy.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

Author

Milko is a DailyCoin reporter, mainly focused on Ethereum (ETH), Cardano (ADA), and their founders (Vitalik Buterin and Charles Hoskinson). Milko is an avid follower of crypto and blockchain technology and has written thousands of articles on the subjects. He finds joy in transforming complex issues into written content that anyone can understand. Milko has used and analyzed numerous exchanges, such as Coinbase, FTX, and Binance. He also closely follows all of the latest news around the largest decentralized exchanges (DEXs).