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Wintermute: Crypto market maker loses $160m in latest DeFi hack

By Alara Jordan

Edited by Charlie Mellor

15:21, 20 September 2022

Illustration of a glowing padlock surrounded by code
Wintermute CEO Evgeny Gaevoy has warned customers of service disruptions following the hack – Photo: Shutterstock

Crypto market maker Wintermute has lost around $160m in a decentralised finance (DeFi) hack as it becomes the latest crypto firm to suffer a breach.

The London-based firm provides liquidity to DeFi exchanges and trading platforms, such as Binance and FTX, and has been operational since 2017. Wintermute CEO Evgeny Gaevoy took to Twitter to confirm the breach, but stated the firm’s centralised activity and over-the-counter services remain unaffected. 

Company remains solvent despite breach

Gaevoy also confirmed that 90 separate assets were stolen, of which only two were recorded to have been for over $1m, and none more than $2.5m.

“There shouldn’t be a major sell-off of any sort. We will communicate with both affected teams ASAP,” Gaevoy said. He added that while it would be open to treating the incident as a white hat attack, the firm remains solvent and operational, with around $320m in equity remaining.

ADA/USD

0.75 Price
+10.100% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.00646

ETH/USD

3,145.80 Price
+1.740% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 6.00

DOGE/USD

0.37 Price
-1.940% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.0012872

XRP/USD

1.11 Price
+21.490% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.01168

Gaevoy also warned customers that there could be a disruption in Wintermute’s services “today” and potentially for a few days following the breach, before all services go back to normal.

“If you are a lender to Wintermute, again, we are solvent, but if you feel safer to recall the loan, we can absolutely do that,” added Gaevoy.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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