Deribit crypto exchange stops withdrawals in the wake of $28M hot wallet hack

After a $28 million hack of its hot wallet, Deribit, a major cryptocurrency derivatives exchange, has stopped withdrawing.

Deribit’s hot wallet was compromised on Nov. 1 at midnight UTC. The firm reported to Twitter.

Deribit’s reserves are sufficient to cover losses.

“Client assets and Fireblocks are not affected. To limit the effects of such events, it is company policy to keep 99% in cold storage.

Deribit was forced to stop withdrawals from Custodians Copper Clearloop, and Cobo as part of ongoing security checks. This is until Deribit is confident that security has been restored following the hack. The firm stated that deposits already sent would be processed and credited to accounts after the required number confirmations.

According to Deribit’s Telegram chat information, trading on Deribit continues as normal. “Due to our Hotwallet policy, we were able limit loss of user funds,” a Deribit support representative stated.

Hacking will not affect Deribit’s insurance, and the exchange will cover the loss. The statement states that Deribit is still in a financial sound position, and that ongoing operations won’t be affected.

Cointelegraph was told by a spokesperson for Deribit that they are aiming to resume withdrawals as quickly as possible and are currently checking all security measures.

Deribit suffered the hack for the first time since its launch.

Deribit was founded in 2016 and allows users to trade options and futures on crypto derivatives. Deribit’s daily trading volume is $280 million at the time of writing, according data from CoinGecko.

Similar: The scary stats: 3B was stolen in 2022, according to Hacktober. This is a double of 2021

Some sections of Deribit’s website appear to be not working at the time of writing. Deribit Insights is the firm’s crypto data center, but it is unavailable at the time of writing , warning that there is a “critical error” on the website. Deribit’s trading website, however, remains intact. A representative from Deribit said that the hack and website problem are not connected.

Opinion writer on 7trade7