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Home » Crypto Derivatives Exchange A Hot Wallet Breach Caused Deribit To Lose $28 Million

Crypto Derivatives Exchange A Hot Wallet Breach Caused Deribit To Lose $28 Million

  • Crypto
deribit exchange
Deribit Exchange
Source : deribit

Deribit, the largest bitcoin options exchange by market share, lost $28 million in a hack. The company also halted withdrawals.

“Deribit hot wallet compromised, but client funds are safe and loss is covered by company reserves,” Deribit tweeted. “Our hot wallet was hacked for USD 28M earlier this evening just before midnight UTC on 1 November 2022.”

The company said it is performing ongoing security checks and has halted withdrawals — including withdrawals from third-party custodians Copper, Clearloop and Cobo — until it is confident that the platform is safe to re-open.

Deribit’s compromised hot wallets contained funds in bitcoin, ether and USDC, the company said. Its cold storage addresses, containing 99% of user funds, were not affected.

The hack is the latest blow for the exchange that recently took a hit from liquidating Three Arrows Capital’s (3AC’s) positions after the now-bankrupt crypto hedge fund failed to meet margin calls. It comes shortly after Deribit raised around $40 million from existing investors at a $400 million valuation, as The Block reported in late September.

Deribit said it “remains in a financially sound position and ongoing operations will not be impacted” by the hack. The company’s insurance fund will also be not impacted as the loss will be covered by its reserves, Deribit said.

Founded in 2016, Deribit caters mainly to institutional investors. It has over 85% share of open interest in bitcoin options trading, according to data from The Block Research. Open interest is the value of outstanding derivative contracts that are yet to be settled.

The article originally published on The Block.