Bitcoin Options Giant Deribit Loses $28 Million in Hot Wallet Hack

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Bitcoin Options Giant Deribit Loses $28 Million in Hot Wallet Hack

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 in a Financially Sound Position’

In terms of open interest and volume tied 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 for nearly $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:

Client assets, Fireblocks or any of the cold storage addresses are not affected. It’s company procedure to keep 99% of our user funds in cold storage to limit the impact of these type of events. 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 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 detailed that the company’s insurance will not be impacted and the loss will be paid by company reserves. Additionally, Deribit said that it also raised the minimum number of confirmations for deposits which caused a delay in crediting 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.”

The wallet holds 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 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).

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

Jamie Redman

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

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