Deribit, a crypto exchange platform, announced via its Twitter account it suffered a hack to its security measures, losing up to $28m.
Hackers were able to access the crypto platform’s hot wallet taking large amounts of Deribit Bitcoin, Ethereum and USDC cryptocurrencies, which all in total amounted to nearly $28m.
Deribit hot wallet compromised, but client funds are safe and loss is covered by company reserves
Our hot wallet was hacked for USD 28m earlier this evening just before midnight UTC on 1 November 2022.
— Deribit (@DeribitExchange) November 2, 2022
Hot wallets are viewed to be of high risk for crypto exchanges as their private keys are integrated in a provider’s servers to sign withdrawal transactions, despite its ability to make the transactions happen instantly.
The hack took 691 Bitcoin and 9,111.59 worth of Ethereum, with the amount of USDC stolen being swiftly converted into Ethereum. The funds are held in two wallets across Bitcoin and Ethereum, with funds not currently transferred to either a mixer or laundering service as of yet.
Deribit has reassured its users that the firm is financially sound, as its reserves will cover the loss without affecting their insurance fund.
Deribit confirmed on Twitter: “We have raised the minimum number of confirmations for the moment, causing a delay in crediting funds. Until we open wallets again we request you not to send new deposits.
“The insurance fund will not be impacted, the loss will be paid by company reserves. Deribit remains in a financially sound position and ongoing operations will not be impacted.”
“We are performing ongoing security checks and have to halt withdrawals, including third-party custodians Copper Clearloop and Cobo until we are confident all is safe to re-open.
“Deposits already sent will still be processed and after the required number of confirmations, they will be credited to accounts.”
This latest crypto hack is one of numerous cases that has occurred over the course of the year, as Chainalysis revealed that 2022 is on course to become the “biggest year for (crypto) hacking on record”.
In mid-October alone, $718m was stolen from DeFi protocols through 11 separate hacks, making it the largest month of the year for crypto hacks.
2/ At this rate, 2022 will likely surpass 2021 as the biggest year for hacking on record. So far, hackers have grossed over $3 billion dollars across 125 hacks. pic.twitter.com/vgT3pz2iOu
— Chainalysis (@chainalysis) October 12, 2022
With 2021 being recorded as the biggest year for crypto hacks, Chainalysis foresees a worrying upward trajectory for crypto crime for the rest of this year, with 2022 to “likely surpass” last year’s record figure.
Chainalysis revealed via Twitter: “At this rate, 2022 will likely surpass 2021 as the biggest year for hacking on record. So far, hackers have grossed over $3 billion dollars across 125 hacks.
