It’s happened again, folks. Another digital currency hack is in the books. This time, the victim is Deribit, a cryptocurrency exchange based in the Central American nation of Panama.
Deribit Has Lost a Lot of Money
At the time of writing, as much as $28 million in crypto assets have been stolen. The exchange confirmed the incident in a tweet a few weeks ago, claiming that it’s BTC, ETH, and USDC hot wallets had been compromised by malicious actors and inherently drained of the units they were holding. At press time, the company has confirmed that its cold storage wallets remain unaffected. The good news is that roughly 99 percent of all crypto units held by Deribit are placed in cold storage, so the incident could have been much worse.
The company also confirmed in a separate statement that the hack did not directly affect any user accounts, and thus all individuals’ monies remain safe and secure. Even still, Deribit has utilized an insurance policy since it began to cover these kinds of issues. Thus, customers can rest assured that if any funds had been stolen, they would have been instantly replaced. For the time being, the company has temporarily ended all withdrawal services and is conducting a security check of its systems.
Crypto exchanges and related businesses have often been the objects of affection of financial thieves, mostly because the crypto space is largely unregulated. There are not many rules in place designed to protect users, and this has been something of a two-sided coin in many ways (pardon the pun). On one hand, digital currency was designed to give all users financial independence and autonomy. Thus, there are no third parties or prying eyes to say what users can and can’t do with their funds.
While some argue that this is what crypto stands for, there are others that claim some level of regulation is necessary to prevent incidents like what has occurred with Deribit. They say some rules are necessary to keep customers safe and ensure their digital currency units remain unaffected.
According to a new report issued by blockchain analysis firm Chainalysis, about $2 billion in digital currency funds have been stolen in 2022 alone, and we still have a month left before the year is over.
Does This Sound Familiar?
There have been several incidents like this in the past. Two big ones that come to mind include Mt. Gox and Coincheck, both of which occurred in Japan approximately four years apart from one another. Mt. Gox occurred in 2014 in the month of February. More than $400 million in BTC units were stolen and very little of that money has ever been given back.
Coincheck saw more than half a billion dollars’ worth of crypto stolen practically overnight in early 2018.
