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Cryptocurrency futures and options exchange Deribit a hack resulting in the loss of around $28 million in digital assets. The platform becomes the latest virtual currency service provider targeted by cybercriminals in a rocky year for crypto prices and on-chain security.
Deribit announced that the hacker attacked a hot wallet operated by the platform. Hot wallets are digital wallets constantly connected to the internet and a blockchain network. Crypto exchanges leverage this web3 tool for large virtual currency transactions and to store frequently used keys – a security mechanism built to protect wallets.
The hacker stole $28 million from the hot wallet late on Tuesday, per Deribit’s Twitter thread on Wednesday. According to the exchange, 99% of customer funds are safe and held in cold storage wallet. Such wallets have limited access to the internet to reduce the chances of an exploit.
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.
The hack is isolated & quarantined to our BTC, ETH and USDC hot wallets.
— Deribit (@DeribitExchange) November 2, 2022
Furthermore, withdrawals were paused and deposits delayed until security checks are complete. The exchange will also offset the loss from its reserves, per details from the update shared with users.
Regarding the digital assets stolen, on-chain security firm Supremacy confirmed that the hacker took about $14 million in Bitcoin (BTC) and Ether (ETH). At press time. EtherScan data some 9,111 ETH in the hacker’s wallet.
1/ According to @DeribitExchange, their hot wallet was hacked and the total loss was
9,080 Ether ($14,169,903) + 691 BTC ($14,141,901) = $28,311,804.
We will continue to track this hacker and ask Deribit to contact us so we can try to help recover the losses. pic.twitter.com/33072Zk7Iz
— Supremacy Inc. (@Supremacy_CA) November 2, 2022
Deribit Joins 2022 Crypto-Hacked List
Indeed, cybercriminals seemingly intensified attacks on crypto platforms and protocols in 2022.
Reports from Chainalysis and Slow Mist recorded over $2 billion in crypto hacks so far. While decentralized finance (DeFi) accounts for the bulk of crypto hack proceeds, exchanges are not exempt from the pattern.
Exploiters had drained over $70 million from crypto exchanges as of June 2022, per reports. Also, October was reportedly the worst month for crypto attacks and on-chain security exploits.
