Crypto exchange Deribit halts withdrawals amid $28M hot wallet hack

Crypto exchange Deribit halted withdrawals following a wallet hack where hackers got away with $28 million in funds stolen.

Leading cryptocurrency derivatives exchange Deribit has halted withdrawals after suffering a $28 million hot wallet hack.

Deribit Exchange compromised its hot wallet before midnight UTC on November 1, the company reported on Twitter.

The exchange emphasized that customer funds are safe as losses are covered by Deribit's reserves, stating:

"Customer resources, Fireblocks, or any of the cold storage addresses are unaffected. It is company procedure to keep 99% of our user funds in cold storage to limit the impact of this type of event."

As part of ongoing security checks, Deribit had to suspend withdrawals, including Copper custodians Clearloop and Cobo, until the exchange was 100% secure after the hack. "Deposits already sent will still be processed, and after the required number of confirmations, they will be credited to accounts," the company added.

According to information on Deribit's Telegram chat, trading on Deribit is working as usual. "Thanks to our hotwallet policy, we were able to limit users' loss of funds," noted a Deribit tech support person.

Deribit's insurance fund will not be affected by the hack, as the exchange will also pay for the loss. "Deribit remains in a financially sound position and ongoing operations will not be impacted," the statement noted.

A Deribit spokesperson told Cointelegraph that the company aims to resume withdrawals as soon as possible and is now checking "all security measures". The platform is also working on a full review of the incident at this time to provide more details on the vulnerability that could have caused the issue, the person added.

The hack was the first time Deribit had suffered such an attack and losses since the company launched, the representative said.

Founded in 2016, Deribit is one of the largest crypto derivatives exchanges in the world, allowing users to trade crypto futures and options. As of this writing, Deribit's dai...