Deribit Freezes Withdrawals and Deposits After $28M Exploit

Exploiters Rip Off Hot Wallets at Exchange

By: Tarang Khaitan Loading...

Deribit Freezes Withdrawals and Deposits After $28M Exploit

Deribit, a cryptocurrency derivatives exchange, has lost $28M in an exploit, the firm said Wednesday in a Twitter thread.

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

“Client funds are safe,” the company tweeted.

Draw on Reserves

The exchange, which recorded $248M in trading volume and $1.2B in open interest in the last 24 hours, paused withdrawals and deposit-taking for an indefinite period. It also increased the number of confirmations required to credit users’ balances.

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

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The Defiant The Defiant

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

Three Arrows Victim

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

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