Deribit freezes withdrawals and deposits after $28 million exploit

Exploiters Scam Hot Exchange Wallets

Deribit, a cryptocurrency derivatives exchange, lost $28 million in an exploit, the company announced on Wednesday. in a Twitter thread.

The exploiter managed to compromise Deribit’s hot BTC, ETH and USDC wallets shortly before midnight on November 1, the exchange said.

“Customer funds are safe,” the company tweeted.

Dip into reserves

The exchange, which registered $248 million in trading volume and $1.2 billion in open interest in the last 24 hours, with withdrawals and deposits suspended indefinitely. It also increased the number of confirmations required to credit user balances.

Derebit said deposits will be credited to users once confirmations are complete.

To cover the loss of $28 million worth of tokens, Deribit will draw from its reserves, the company said. “Deribit remains in a financially sound position and ongoing operations will not be impacted.” the company tweeted.

Victim of the Three Arrows

Deribit is one of many victims of Three Arrows Capital, the $10 billion crypto hedge fund that went bankrupt this summer. In July, Deribit was appointed as one of TAC’s 32 creditors in a lawsuit filed in a Singapore court.

Deribit’s exploit comes at a time when the crypto has suffered one of the worst months in recent history. In October, the crypto industry lost a record $760 million exploits, according to data compiled by PeckShield. The industry suffered $3 billion in stolen assets, double the rate in 2021.