Crypto Exchange Deribit Disables Withdrawals After Hot Wallet Exploit Drained $28 Million In Crypto

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Crypto Exchange Deribit Disables Withdrawals After Hot Wallet Exploit Drained $28 Million In Crypto
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Last night, Deribit, a leading crypto derivatives exchange, was the latest victim of a hack that ultimately drained the exchange of $28 million. The exchange has temporarily halted withdrawals in response to the attack while maintaining that user funds have not been affected.

$28M Stolen From Deribit

Hackers have stolen millions in crypto assets from Deribit’s hot wallet, a rare blow to the world’s biggest crypto options exchange and another dent to the troubled cryptocurrency sector struggling to regain trust after a catastrophic price collapse.

The perpetrator targeted Deribit just before midnight on November 1, successfully making off with around $28mn worth of crypto. The exchange notes that its clients’ assets are safe, adding that its reserves have covered the losses.

“It’s company procedure to keep 99% of our user funds in cold storage to limit the impact of these types of events. The hack is isolated & quarantined to our BTC, ETH, and USDC hot wallets,” Deribit said on Twitter.

The trading platform emphasized that it remains in a solid financial position and that the recent hot wallet attack will not affect its operations. However, Deribit had to halt withdrawals, including third-party custodians Copper Clearloop and Cobo, as part of ongoing security checks. The Panama-based exchange says it will only reopen withdrawals once it’s 100% confident all is safe following the security compromise.

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“Deposits already sent will still be processed, and after the required number of confirmations, they will be credited to accounts,” Deribit further noted.

Deribit Joins Long List Of Crypto Companies Targeted By Hacks This Year

The attack on Deribit comes at a time when cryptocurrencies are attempting to recover from a liquidity crisis that wiped nearly two-thirds off the value of its most major assets, such as bitcoin and ether.

Industry data has also revealed that theft from crypto projects is skyrocketing this year. Cybercriminals have grossed over $3 billion this year alone across approximately 126 hacks. High-profile thefts included $325 million from Solana-based cross-chain service Wormhole, a $625 million exploit of Axie Infinity’s Ronin bridge, and Wintermute’s $160M loss to hackers. Binance-linked blockchain was recently the target of another colossal hack. Hackers were able to steal $100 million in cryptocurrencies from the BNB Chain.

Deribit’s position as the market leader for bitcoin options means Tuesday’s exploit represents a significant blow to the crypto industry.