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

Major cryptocurrency derivatives exchange Deribit has halted withdrawals after experiencing a $28 million Hot wallet hack.

The 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 because losses are covered by Deribit reserves, saying:

“Client assets, Fireblocks or any of the cold storage addresses are not affected. It is company procedure to keep 99% of our user funds in cold storage to limit the impact of these types of events.
As part of ongoing security checks, Deribit has halted withdrawals, including deposits from Copper Clearloop and Cobo, until the exchange is 100% secure following the attack. “Deposits already sent will still be processed and after the required number of confirmations, the accounts will be credited,” the company added.

According to information in the Deribit Telegram chat, trading on Deribit works as usual. “Through our hotwallet policy, we were able to limit the loss of user funds,” noted a Deribit support person.

Deribit’s insurance fund is not affected by the hack, as the exchange also pays for the loss. “Deribit remains in a strong financial position and ongoing operations will not be affected,” the statement said.

A Deribit spokesperson told Cointelegraph that the company aims to reverse the withdrawals as soon as possible and is now reviewing “all security measures”. The platform is also now working on a full incident review to provide more details about the vulnerability that could cause the issue, the person added.

The hack was the first time Deribit had experienced such an attack and loss since the company’s launch, 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. At the time of writing, Deribit’s daily trading volume stands at $280 million, according to data from CoinGecko.

Related: Scary Stats: $3 Billion Stolen in 2022 According to ‘Hacktober’, Doubling 2021

At the time of writing, some sections of the Deribit website also appear to be down. Deribit Insights, the company’s crypto data center, is unavailable at the time of writing, indicating a “critical error on this website.” In the meantime, Deribit’s trading website is intact. According to a Deribit representative, the website problem and the hack are unrelated.

Source: CoinTelegraph