Deribit Cryptocurrency Derivatives Exchange Hot Wallets Hacked for $28 Million, Withdrawals Halted

 




Deribit becomes the latest in a long list of crypto companies to be targeted by hacks in 2022.


An notification made on Twitter claims that the cryptocurrency derivatives platform Deribit was compromised for $28 million (about Rs. 231.7 crore) late on November 1. The trading platform claims that the cash of its customers are secure and adds that any losses have been paid by its own reserves, so the hacking incident won't have an impact on Deribit's insurance fund. Deribit asserts that it keeps 99 percent of the money from its clients in cold storage locations. The hot wallets for Bitcoin, Ether, and USD Coin on the exchange were successfully compromised by the attacker.

These wallets have been contained and segregated, the exchange added. Deribit consequently confirmed that the majority of client accounts, including Fireblocks, were unaffected. Deribit further emphasised that any hot wallets that were not impacted by the breach assets in cold storage were completely safe.

Even though the exchange claimed to be still in operation, it is now putting many security measures in place. For example, it declared that withdrawals would need to be temporarily stopped, even for third-party custodians Copper Clearloop and Cobo.


Deribit did, however, affirm that it was still processing customer deposits, albeit a little more slowly. It said that in order to avoid delays, the minimum number of confirmations needed to complete transactions had to be increased.

Users are happy that the exchange guaranteed the security of customer cash and paid for losses using corporate reserves rather than its insurance fund.

Data from the derivatives data site Coinglass show that Deribit is still in charge of the bitcoin options market. The overall interest in Bitcoin options is held by the Dutch derivatives exchange, which is currently based in Panama, to the tune of 89.76 percent. CME, a world leader in derivatives with headquarters in Chicago, comes in second with a 6.87 percent market share. The top five also includes FTX and OKX.

Deribit, on the other hand, has astounding control over the Ethereum options market, holding a massive 96.64 percent of the market.

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