Major crypto derivatives exchange Deribit has suspended withdrawals after it was hacked into a $28 million wallet.
The Deribit exchange was compromised just before midnight UTC on November 1, the company said on Twitter.
The exchange confirmed that client funds are safe as losses are covered by Deribit reserves, stating:
“Customer assets, Fireblocks, or any other cold storage addresses will not be affected. It is a company measure to keep 99% of our users’ funds in cold storage to reduce the impact of this type of event.”
As part of its ongoing security checks, Deribit was forced to halt withdrawals, including Custodian Copper Clearloop and Cobo, until the exchange was 100% confident about the security following the hack. “Deposits already sent will still be processed and, after the required number of confirmations, will be credited to the accounts,” the company added.
According to the information in the Deribit chat on Telegram, trading on Deribit is working as usual. A Deribit support official noted that “due to our hot wallet policy, we have been able to limit the loss of user funds.”
Deribit’s insurance fund will not be affected by the hack, as the exchange will pay the loss as well. The statement notes that “Deribit remains in a healthy financial position and ongoing operations will not be affected.”
A Deribit spokesperson told Cointelegraph that the company aims to resume withdrawals as soon as possible and is now checking “all security measures.” The person added that the platform is also working on a full incident review right now to provide more details about the vulnerability that could have caused the problem.
The representative said the hack is the first time Derpt has suffered such an attack and losses since the company was launched.
Founded in 2016, Deribit is one of the largest crypto derivatives exchanges in the world, allowing users to trade in cryptocurrency futures and options. At the time of writing, Deribit’s daily trading volume is $280 million, according to data from CoinGecko.
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At the time of writing, it also appears that some sections of the Deribit website are not working. Deribit Insights, the company’s crypto data center, is unavailable at the time of writing, showing a “fatal error on this site”. In the meantime, the Deribit trading site is sound. According to a Deribit representative, the website and hack issue are unrelated.