Deribit Hacked, “Funds Are Safe”

Deribit, one of the biggest bitcoin and ethereum derivatives exchange, has been hacked out of $28 million.

“Our hot wallet was hacked for USD 28m earlier this evening just before midnight UTC on 1 November 2022,” the exchange said.

No detail was provided in regards to how the hack happened exactly or whether account information, like usernames and passwords, were affected.

“We are performing ongoing security checks and have to halt withdrawals until we are confident all is safe to re-open,” the exchange stated.

The hack is “isolated and quarantined” to their bitcoin, eth and USDc hot wallets. They keep the vast majority of their assets in the cold wallets, which are not affected.

In addition, the Insurance Fund won’t be used to cover this hack, instead “the loss will be paid by company reserves.”

“Deribit remains in a financially sound position and ongoing operations will not be impacted.”

This is the first hack of Deribit, an exchange that came to prominence in 2019 for being one of the first to launch bitcoin and ethereum options.

Since then there has been speculation in regards to whether the exchange – or partnered market makers – trade against their own clients.

It’s where Sam Bankman-Fried, now CEO of FTX, first made his fortune with Deribit further rising to prominence due to BitMex facing legal uncertainties about two years ago.

The hack of $28 million is not substantial in sum, but considering these exchanges are not independently audited, Deribit might have to re-assure their customers with further details probably to follow in regards to how exactly this breach was allowed, and why was it not caught.