The world’s largest bitcoin options exchange, Deribit, was hacked for close to $28 million, according to an update from the company’s official Twitter account on Nov. 2. Deribit says that the firm’s hot wallet was drained just before midnight the day prior.
Crypto derivatives exchange Deribit loses $28 million – company says customer funds are safe and business remains ‘financially sound’
In terms of open interest and volume associated with 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 reported that the trading platform’s hot wallet had been duped for approximately $28 million.
“Deribit hot wallet compromised, but client funds are safe and loss is covered by company reserves,” Deribit said on Wednesday. Our hot wallet was hacked for USD 28m earlier this evening just before midnight UTC on 1 November 2022,” the trading platform added. The crypto derivatives exchange further explained:
None of the client’s assets, fireblocks or cold storage addresses are affected. It is Company’s process to keep 99% of our User Funds in cold storage to limit the impact of such incidents. hack is different [and] Quarantined in our BTC, ETH and USDC hot wallets.
The hack follows the loss Deribit suffered when it liquidated a few positions tethered to the well known and now-defunct cryptocurrency hedge fund Three Arrows Capital (3AC). Deribit said on Wednesday that it halted withdrawals until the exchange is “confident all is safe to re-open.”
The crypto derivatives firm further elaborated that the company’s insurance will not be affected and losses will be paid by the company’s reserves. Additionally, Deribit said that it also increased the minimum number of confirmations for deposits which caused delays in depositing funds.
Deribit further shared an ethereum (ETH) address and remarked that some of the hacked funds remained in the wallet. The address is flagged on etherscan.io as it says: “this address is reported to be involved in an exploit draining Deribit’s hot wallet.”
Using today’s Ethereum (ETH) exchange rates there are 9,111.59 Ether worth $14.17 million in the wallet. Deribit also shared the bitcoin (BTC) address where some of the hacked funds reside at the time of writing. The bitcoin wallet holds 691.12 BTC worth $14.15 million using today’s bitcoin exchange rates.
“Deribit remains in a financially sound position and ongoing operations will not be impacted,” the exchange concluded on Wednesday morning (ET).
