Deribit’s Wallet Got Hacked; $28 Million Stolen

As the crypto sector is slowly recovering from a bear market, illicit entities turned their efforts back to hacking. The latest victim is the largest bitcoin options exchange by market share, Deribit, with its hot wallet hacked for $28 million.

Indeed, the exchange’s BTC, ETH, and USDC hot wallets got compromised, but Deribit commented that the losses would be covered from its reserves.

“Deribit hot wallet compromised, but client funds are safe and loss is covered by company reserves Our hot wallet was hacked for USD 28m earlier this evening just before midnight UTC on 1 November 2022,” the exchange announced, clarifying that no cold wallets were harmed and users’ funds are safe.

What about deposits and withdrawals?

Currently, Deribit stopped all deposits and withdrawals, with the exchange conducting ongoing security checks to halt withdrawals for users including third-party custodians. Deposits would be resumed after the exchange got 100% confirmation of regaining control.

“We have raised the minimum number of confirmations for the moment causing a delay in crediting funds. Until we open wallets again we request you not to send new deposits,” Deribit added.

Deribit is taking on hit after hit as the exchange already saw the liquidation of Three Arrows Capital’s (3AC’s) positions after the now-bankrupt crypto hedge fund failed to meet margin calls.

"We’re still looking at the attack vectors, we can’t share beyond what we’ve shared at this moment but we’re looking into how access was gained," Deribit's Chief Commercial Officer, Luuk Strijers, commented.

Crypto attacks increased by 192%

Crypto-related cyber attacks surged significantly since the start of the year, despite the bear market and overall uncertainty in the crypto sector due to increased volatility. Deribit has joined a list of crypto companies that got stung by hackers, with the exchange being the most recent incident. October happened to be the worst month with incidents of theft, as approximately $178 million got stolen in only the first two weeks of the month.

Since the start of 2022, more than $3 billion worth of cryptocurrency has been stolen, with the most preferred targets being decentralized finance protocols and cross-chain bridges, according to a recent report by Chainalysis.