On the hours of the early morning of November 2, Deribit, a popular crypto derivatives exchange based in Panama, became the latest cryptocurrency exchange to be affected by a cyber hack. Deribit Chief Commercial Officer, Luuk Strijers addressed the incident with an official statement which gave details about the cyber breach.
In his statement, Strijers confirmed that hot wallets belonging to the crypto exchange were in fact drained for an estimated $28 million USD before the hack was discovered and contained. The only information revealed about how the breach happened so far has been that the hacker was able to access the Deribit server which gave the unknown individual an entrypoint to the hot wallets.
What Is The Impact On Deribit Exchange And Clients?
In his statement, Strijers also assured that Deribit client assets had not, and would not be affected by the effects of the breach. Withdrawals, however, were temporarily paused while the exchange ran security checks behind the recent hack. The crypto community has been ravaged by a sharp rise in cyber attacks over the past year. In the first two weeks of October alone the benchmark of $718 Million in stolen assets through cyber attacks in the blockchain market, was the worst in its history.
Chief Strijers reported that only 1% of the crypto exchanges assets are kept in hot wallet storage, leaving 99% of the digital assets held and controlled by the exchange unaffected by the attack. The speed of the statement was also timely, as a Deribit tweet went out alerting official Deribit Twitter account followers about the event, also providing multiple updates within the hours following the initial communication.
Client withdrawals and transactions which were in the process were stalled once the breach began taking place. They were then reportedly credited and accounted for once the futures and options exchange began reopening its network several hours after the attack.
Further Details Into The Hack And Wrap-Up
Further down in the contents of the thread attached to the initial tweet published on the Deribit Twitter page, it was also shared that the attack was isolated to USDC, BTC and ETH hot wallets under the control of the company. Assets held on the Deribit balance sheet will be the reported source used to cover the losses absorbed in the breach, which will render the $40 million dollar insurance policy held by the firm unnecessary to touch. Details were also shared in the tweet thread.
Updated news came in hours after withdrawals were halted, instructing clients to establish new deposit addresses. It was published that no old deposit addresses will be honored by the exchange, which is establishing this as a necessary step for all of its existing clients to take in order to resume functional operations within the platform. This crypto news today comes on just the second day of November. Hopefully, it isn’t a sign of what is to be expected in the digital asset space which has been under heavy cyber attack through this year of record-breaking losses in a predominately bearish market.