After The Hot Wallet Hack, Deribit Reopened Regular Withdrawal

Deribit, Leading cryptocurrency Options and Futures Exchange, recently announced its “hot wallet” hack for USD 28 Million on November 2, 2022, evening, just before midnight UTC on November 1, 2022. After this, the crypto exchange has halted its withdrawal. 

Deribit, founded in 2016, is one of the leading cryptocurrency futures and options exchanges. This helps crypto traders to execute derivatives trading strategies for cryptocurrencies. John Jansen is the Chief Executive Officer (CEO) of Deribit.

Derbit’ “Hot Wallet” Hack

Deribit made the security announcement on its official twitter account as “Security Incident Update,” and stated that it will start its working for opening regular on-chain withdrawals later today (November 2, 2022.)

It is also to be noted that Deribit is not available in the United States and the rest of the restricted countries.

In the twitter thread, the crypto exchange clarified that all its deposit addresses for BTC, ETH and USDC would be re-generated and the front end user’s previous address(es) have been removed.

It was also mentioned that while reopening wallets, Deribit will not support deposits on the old deposit addresses. All its users need to create a new deposit address. While, withdrawals through third-party custodians Copper Clearloop and Cobo have been re-enabled.

On the next day, Security Incident Update-II, Deribit announced that it reopened regular withdrawals for BTC, ETH, and USDC. And it also has migrated all hot wallets of Fireblocks as all Deribit deposit addresses to be renewed.

For assistance, Deribit have appointed an on-chain forensics company, that is tracking and recovering assets or liaising with the Global Law Enforcement.

In the most recent update of Deribit on its official twitter account, it alerts the depositors to not send funds to their respective previous BTC, ETH, and USDC deposit addresses. As the exchange requires from its users to create new Fireblocks deposit addresses.

The term “hot wallet” is better known for those crypto wallets that can be connected to the internet and accessed with the help of electronic devices like smartphones, laptops. The crypto exchanges that store users’ funds into its digital platform are known as “hot wallet providers.”

The main reason for the “hot wallet” hack is due to its online presence that makes it quite vulnerable to hack the hot wallet. 

Some Massive Hot Wallet Hacks

There were some recent hot wallet hacks like the recent $8 Million Solana hack in August 2022. Also, the world’s largest cryptocurrency exchange, Binance, also got hacked in May 2019 with around $41 Million. Just after two months, Bitpoint, the crypto exchange, was hacked with the loss of around $32 Million.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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