Deribit stopped accepting withdrawals after a hot wallet attack in which thieves made off with $28 million in stolen funds.
Deribit, a major cryptocurrency derivatives exchange, has stopped accepting withdrawals after being the victim of a $28 million hot wallet breach. Deribit exchange’s hot wallet was compromised, the company announced on Twitter before 00:00 UTC on November 1.
The exchange highlighted that client assets are secure because Deribit’s reserves cover losses, saying:
“Client assets, Fireblocks or any of the cold storage addresses are not affected. It’s company procedure to keep 99% of our user funds in cold storage to limit the impact of these type of events.”
Deribit had to restrict withdrawals as part of continuous security tests, including those from custodians Copper Clearloop and Cobo, until the exchange was completely assured in security following the incident.
“Deposits already sent will still be processed, and after the required number of confirmations, they will be credited to accounts,” the firm added.
According to the information on Deribit’s Telegram chat, trading on Deribit is operating as usual. “Due to our hotwallet policy we were able to limit loss of user funds,” a Deribit support person noted.
The hack won’t have an impact on Deribit’s insurance money because the exchange will cover the loss as well. “Deribit remains in a financially sound position and ongoing operations will not be impacted,” the statement notes.
A representative for Deribit said that the firm is now examining “all security measures” in an effort to resume withdrawals as soon as feasible. In order to provide further information regarding the vulnerability that might have led to the problem, the platform is currently embarking on a comprehensive incident review.
Since the company’s founding, Deribit had never been subject to such an attack or suffered damages, according to the spokesman.
Deribit, one of the biggest cryptocurrency derivatives exchanges in the world, was founded in 2016 and lets customers trade cryptocurrency futures and options. Deribit has $280 million worth of daily trade activity as of this writing, according to data from CoinGecko.