(Kitco News) - Deribit, the leading bitcoin derivatives exchange, lost $28 million after their hot wallets were hacked, forcing the company to halt withdrawals as they perform comprehensive security checks.
"Deribit hot wallet compromised, but client funds are safe and loss is covered by company reserves," the company announced on Twitter. "Our hot wallet was hacked for USD 28m earlier this evening just before midnight UTC on 1 November 2022."
The exchange said the compromised hot wallets contained bitcoin, ether and USDC. Deribit’s cold storage addresses, where 99% of user funds are kept, were not affected by the cyberattack.
All withdrawals were halted in the wake of the hack as Deribit worked to ensure that their platform is not compromised. Withdrawals via third-party custodians Copper, Cobo and Clearloop were also halted, but resumed earlier on Tuesday. Deribit indicated that they expect regular client withdrawals to be reinstated later in the day.
“As of the moment of re-opening wallets, we will not support deposits on old deposit addresses anymore,” the exchange announced. “All users need to create a new deposit address.”
The company said that deposits already sent for processing will be credited as soon as the required confirmations are met, but new deposits should not be made until the security checks are completed.
“We have raised the minimum number of confirmations for the moment causing a delay in crediting funds,” Deribit wrote to clients. “Until we open wallets again we request you not to send new deposits.”
The Dutch-owned Deribit was founded in 2016 and is based in Panama. It is by far the biggest player in crypto derivatives, with nearly 90% market share in Bitcoin options, and a commanding 97% share of the Ethereum options market. This is the first reported instance of a major hack that led to significant losses since the exchange launched.
This is the latest hack in a string of high-profile incidents that have plagued the crypto ecosystem throughout 2022, including a $100 million exploit of a bridge on BNB Smart Chain and a $100 million hack of the Solana-based decentralized finance protocol Mango Markets.
