Crypto Exchange Deribit Loses $28 Million to Hot Wallet Hack

Hackers hit Deribit, one of the world’s largest crypto trading platforms, and managed to steal $28 million in one swoop, prompting the company to suspect exchanges while they assess the security measures.

Another day marks yet another crypto hack. Hackers have heavily targeted crypto trading platforms, digital wallets, and other services in recent few months. Most of the time, they find vulnerabilities in the software or even in the blockchain and exploit them until they're caught. In this latest hack, the Deribit hot wallet was somehow compromised, but the company has yet to say how that was possible.

"Deribit hot wallet compromised, but client funds are safe and loss is covered by company reserves," said the company on Twitter. "Our hot wallet was hacked for USD 28m earlier this evening just before midnight UTC on 1 November 2022."

"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 & quarantined to our BTC, ETH and USDC hot wallets," they added.

This is not the first time hackers have targeted hot wallets, mostly because cold storage is much more challenging to hit. Hot wallets allow their owners to have crypto available at a moment's notice for transactions and exchanges, but being connected online makes them much more vulnerable.

October was a tough month for the crypto ecosystem, with security incidents almost daily. Now, it looks like November is continuing this trend.