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.
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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.
Client assets, Fireblocks or any of the cold storage addresses are not affected. It's company procedure to keep 99% of our user funds in cold storage to limit the impact of these type of events.
— Deribit (@DeribitExchange) November 2, 2022
The hack is isolated & quarantined to our BTC, ETH and USDC hot wallets.
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.
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