Deribit Hot Wallet Breached
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Cryptocurrency options and futures exchange Deribit experienced a hack in which $28 million was stolen from its hot wallet. The incident occurred just before midnight UTC on November 1, 2022. Fortunately, client assets and cold storage addresses, including those of third-party custodians, remain unaffected by the hack. Deribit follows a protocol of keeping 99% of user funds in cold storage to minimize the impact of such events. To ensure security, Deribit has temporarily halted withdrawals, including those of third-party custodians, while they conduct ongoing security checks.
This is a global/international case not involving a specific country.[1][2][3][4][5][6]
About DeriBit
"Cryptocurrency options and futures exchange Deribit has been hacked, with $28 million being drained from its hot wallet."
"Deribit hot wallet compromised, but client funds are safe and loss is covered by company reserves
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."
"We are performing ongoing security checks and have to halt withdrawals including third-party custodians Copper Clearloop and Cobo until we are confident all is safe to re-open."
"Deposits already sent will still be processed and after the required number of confirmations, they will be credited to accounts."
"We have raised the minimum number of confirmations for the moment causing a delay in crediting funds. Until we open wallets again we request you not to send new deposits."
"The insurance fund will not be impacted, the loss will be paid by company reserves. Deribit remains in a financially sound position and ongoing operations will not be impacted."
"During an appearance on CoinDesk TV on Wednesday, Deribit's chief commercial officer, Luuk Strijers, said client assets have not been affected but withdrawals have been temporarily halted as the exchange makes security checks."
""Hackers have gained access to our wallet server, which enabled them to initiate withdrawals from our hot wallet," Strijers said. "We keep 99% of our assets in cold storage and only 1% in hot wallets. The hacker gained access to these hot wallets."
"Strijers also revealed that the entirety of the loss will be covered by Deribit's balance sheet assets, which are separate from the company's $40 million insurance fund."
This is a global/international case not involving a specific country.
The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.
Include:
- Known history of when and how the service was started.
- What problems does the company or service claim to solve?
- What marketing materials were used by the firm or business?
- Audits performed, and excerpts that may have been included.
- Business registration documents shown (fake or legitimate).
- How were people recruited to participate?
- Public warnings and announcements prior to the event.
Don't Include:
- Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
- Anything that wasn't reasonably knowable at the time of the event.
There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.
The Reality
This sections is included if a case involved deception or information that was unknown at the time. Examples include:
- When the service was actually started (if different than the "official story").
- Who actually ran a service and their own personal history.
- How the service was structured behind the scenes. (For example, there was no "trading bot".)
- Details of what audits reported and how vulnerabilities were missed during auditing.
What Happened
The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.
| Date | Event | Description |
|---|---|---|
| November 1st, 2022 6:27:23 PM MDT | Hot Wallet Compromised | The DeriBit ethereum hot wallet is compromised with the funds going to the attacker on the blockchain. |
| November 2nd, 2022 1:03:00 AM MDT | DeriBit Tweet | DeriBit shares a tweet to report on the hack publicly. |
| November 2nd, 2022 1:44:12 AM MDT | CoinDesk Article Published | CoinDesk publishes an article reporting on the situation. |
Technical Details
This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?
Total Amount Lost
The total amount lost has been estimated at $28,000,000 USD.
How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?
Immediate Reactions
How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?
Ultimate Outcome
What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?
Total Amount Recovered
The total amount recovered is unknown.
What funds were recovered? What funds were reimbursed for those affected users?
Ongoing Developments
What parts of this case are still remaining to be concluded?
Individual Prevention Policies
No specific policies for individual prevention have yet been identified in this case.
For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.
Platform Prevention Policies
Policies for platforms to take to prevent this situation have not yet been selected in this case.
For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.
Regulatory Prevention Policies
No specific regulatory policies have yet been identified in this case.
For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.
References
- ↑ Crypto Exchange Deribit Loses $28M in Hot Wallet Hack, Pauses Withdrawals (Nov 13, 2022)
- ↑ Deribit Hacker Has Started Moving the Stolen $28M to Tornado Cash (Sep 14, 2023)
- ↑ Deribit hackers move stolen Ether to Tornado Cash crypto mixer (Sep 14, 2023)
- ↑ @DeribitExchange Twitter (Sep 14, 2023)
- ↑ Deribit Hotwallet Exploiter | Address 0xb0606f433496bf66338b8ad6b6d51fc4d84a44cd | Etherscan (Sep 14, 2023)
- ↑ Ethereum Transaction Hash (Txhash) Details | Etherscan (Sep 14, 2023)