Deribit hack: When will client withdrawal ban be lifted after $28m hot wallet loss?
The cryptocurrency trading platform Deribit lost $28m worth of funds in a hack on 1 November.
Deribit, which specialises in derivatives trading and the crypto options market, saw its bitcoin (BTC), Ethereum (ETH) and usd coin (USDC) hot wallets compromised.
This news follows a difficult peroid for cryptocurrencies with October as the worst month for crypto hacks. More than $718m was stolen by attackers in just the first two weeks, according to Chainalysis.
BTC to USD
What happened?
On 2 November, Deribit tweeted that its hot wallet was hacked the previous day and $28m was stolen. However, it emphasised that clients’ assets were not affected.
Deribit hot wallet compromised, but client funds are safe and loss is covered by company reserves
— Deribit (@DeribitExchange) November 2, 2022
Our hot wallet was hacked for USD 28m earlier this evening just before midnight UTC on 1 November 2022.
The trading platform said: “It's company procedure to keep 99% of our user funds in cold storage to limit the impact of these type of events.”
As well as clients’ assets, the protected funds included those using the Fireblocks banking platform and anyone utilising Deribit’s cold storage addresses. Derbit tweeted:
The derivitaves exchange said it would be paying for these losses through its company reserves, rather than the insurance fund.
ETH to USD
Halting deposits and withdrawals
Deribit stopped deposits and withdrawals on the platform to enable the exchange to perform security checks. This included activity from third-party custodians, such as Cobo and Copper Clearloop.
The trading platform has not given an exact time when it would continue processing withdrawals and deposits. However, Deribit said it would re-open when it is “confident all is safe”.
It tweeted: “Deribit remains in a financially sound position and ongoing operations will not be impacted.”
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