Crypto Exchange Deribit Hacked for $28M in Bitcoin, Ethereum, USDC

Crypto Exchange Deribit Hacked for $28M in Bitcoin, Ethereum, USDC

Crypto futures and options exchange Deribit suffered a security breach around midnight on Tuesday, and hackers made off with almost $28 million from the exchanges hot wallet. Exchanges typically use hot wallets for instant withdrawals. These types of wallets, however, carry high risks, since their private keys are stored on the companys servers for signing withdrawal transactions.  

In a Twitter statement, the Panama-based exchange said its hot wallet was compromised in the $28m attack, but the customers assets and cold storage addresses were unaffected. While almost $28 million was stolen by hackers, Deribit noted “the hack was isolated to their hot BTC, ETH, and USDC wallets”. . The hackers made 691 BTC and 9,111.59 ETH off of the hack, and USDC that was grabbed was quickly converted into Ethereum.

The funds are now held in two wallets, spread between bitcoin and Ethereum. The funds are not being moved into any sort of mixing (or laundering) services at the time of this writing.

The company has assured users they are still in “a financial healthy situation” and their reserves are covering losses, with no impact on the insured funds. Deribit said they are “performing continuing safety checks” and halted withdrawals from the exchange. The company has also advised against putting in fresh funds. Deribit said “deposits that are already sent will still be processed, and once they reach the required amount of confirmations, will be charged to accounts”. 

. The derivatives exchange was also the victim of insolvency for the Three Arrows Capital (3AC) investment company. Decrypt has reached out to Deribit to get the timeline for ongoing security checks, and will update this story should the firm respond. 

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