Bitcoin Options Giant Deribit Loses $28 Million In Hot Wallet Hack – Bitcoin News

The world’s largest bitcoin options exchange, Deribit, was hacked for nearly $28 million, according to an update from the company’s official Twitter account on Nov. 2. Deribit says the firm’s hot wallet was tapped just before midnight the previous day.

Crypto derivatives exchange Deribit loses $28m – Company says customer funds are safe and business ‘remains in a financially sound position’

In terms of open interest and volume related to bitcoin (BTC) and ethereum (ETH) options, Deribit has been the leading crypto options exchange for quite some time now. On Wednesday, the exchange’s official Twitter account explained that the trading platform’s hot wallet was siphoned off for nearly $28 million.

“Deribit hot wallet compromised, but client funds are safe and losses are covered by company reserves,” Deribit so on Wednesday. Our hot wallet was hacked for USD 28 million earlier tonight just before midnight UTC November 1, 2022,” the trading platform added. The crypto derivatives are further exchanged explained:

The client’s assets, fire blocks or any of the cold storage addresses are not affected. It is company procedure to keep 99% of our consumables in cold storage to limit the impact of this type of incident. The hack is isolated [and] quarantined to our BTC, ETH and USDC hot wallets.

The hack follows the loss Deribit suffered when it liquidated a few positions linked to the well-known and now defunct cryptocurrency hedge fund Three Arrows Capital (3AC). Deribit said on Wednesday that they stopped withdrawals until the exchange is “certain that everything is safe to reopen.”

The crypto derivatives firm further detailed that the company’s insurance will not be affected and the loss will be paid from the company’s reserves. In addition, Deribit said they also raised the minimum number of confirmations for deposits which caused a delay in crediting funds.

Deribit further shared an ethereum (ETH) address and noted that some of the hacked funds remained in the wallet. The address is flagged on etherscan.io as saying: “this address is reported to be involved in an exploit that drains Deribit’s hot wallet.”

The wallet has 9,111.59 ether worth $14.17 million using today’s ethereum (ETH) exchange rates. Deribit also shared the bitcoin (BTC) address where some of the hacked funds remain at the time of writing. The Bitcoin wallet has 691.12 BTC worth $14.15 million using today’s bitcoin rates.

“Deribit remains in a financially sound position and ongoing operations will not be affected,” the exchange concluded Wednesday morning (ET).

What do you think about the recent close to $28 million Deribit hack? Let us know what you think about this topic in the comments section below.

Jamie Redman

Jamie Redman is the news editor at Bitcoin.com News and a financial technology journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.