Crypto Exchange Deribit Paused Withdrawals After Losing $28Million in a Hot Wallet Hack

Deribit Crypto Exchange Hack

After losing a whopping amount worth $28Million to a hot wallet hack last night, the crypto exchange Deribit temporarily paused all the withdrawals to respond to the attack. As per the company’s claim on Twitter, the clients’ assets and funds are safe & unaffected as company reserves covered the loss.

The company further explained that it is their procedure to keep 99% of users’ assets in a cold wallet to avoid the impact of such incidents. The hot wallets which got affected and hacked are their ETH, BTC and USDC wallets.

Deribit is one of the world’s biggest cryptocurrency exchanges. Even after this hack, the company claims it is in a solid financial position with no effect on its operations. However, they have halted the withdrawals for their security checks, including third parties like Cobo and Copper Clearloop.

After getting 100% sure that everything is safe, the exchange will reopen the withdrawal service. As far as the deposits are concerned, those that are already sent are still in process. Once the team does all the confirmations, they will be credited to the respective accounts.

After facing a significant liquidity crisis, when cryptocurrencies were recovering, this hot wallet hack of Deribit occurred, wiping off almost two-thirds of its major assets, including Bitcoin and Ether.

Although the company claims to be in a good financial situation despite the recent attack, there is no doubt that the ecosystem has been targeted by malicious attacks several times in the last few months.

This year, the crypto-theft attacks and attempts have skyrocketed. On average, around 126 hacks are accounted for this year, leading to a total loss of $3 billion. Some high profile ones include the $100 million theft from BNB chain, $160 million loss to Wintermute, $325 million stolen from Wormhole and the loss of $625 million of Axie Infinity Ronnie Bridge. On top of that, October is the worst month, accounting for a loss of around $718 Million in the first two weeks only.

All these ongoing crypto-thefts are continuously raising an important question: “Is it really safe and worth investing in Cryptocurrency or these exchanges anymore?” Well, nothing is safe on the internet, and thus appropriate due diligence is required by all financial institutions to curb this crime rate.

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