BitMart hack: users will be reimbursed
BitMart hack: users will be reimbursed

BitMart hack: users will be reimbursed

By Marco Cavicchioli - 6 Dec 2021

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BitMart founder and CEO Sheldon Xia said users affected by the hack will be reimbursed. 

Xia today confirmed the hack at the crypto exchange, stating that it was a security breach caused primarily by a stolen private key that compromised two hot wallets. 

With this single private key, the hackers were able to steal a total of about $196 million worth of cryptocurrencies from the two wallets. 

Of this, around $100 million relates to tokens on the Ethereum blockchain, while the remaining $96 million relates to tokens on the Binance Smart Chain. 

The exchange’s other wallets were not compromised. 

It was discovered that the hacker who managed to steal the funds then used the DEX 1inch aggregator to exchange the stolen tokens for ETH, which he then routed through the Tornado Cash mixer to try to make them untraceable. 

Xia stated that the company will use its own funds to cover the losses caused by this theft and compensate users. 

The company will put in its own funds to cover losses from yesterday’s theft

He also stated that they still need some time to resume full operations, as they are still working on security procedures. 

However, the goal would be to reactivate deposits and withdrawals as early as tomorrow, 7 December 2021. 

All exchanges have, in addition to offline cold wallets, hot wallets where they store tokens that users can withdraw to their personal wallets. These hot wallets are of course accessible to anyone with a private key, so the hacker only needed to get hold of the private key of two of the exchange’s hot wallets to get hold of the tokens stored there. 

Moreover, in recent months, there have been a number of somewhat similar hacker attacks, often targeting DeFi protocols. BitMart is a centralized exchange, but hot wallets function in the same way whether they are storing CEX deposits or funds from DeFi protocols. 

Often, as in the case of BitMart, these are actually relatively simple attacks, because they simply intercept the private key, perhaps stored somewhere online, and then use it to transfer funds to public addresses they own. 

Unfortunately, it is not uncommon for hackers to manage to steal tens, if not hundreds of millions of dollars in tokens and cryptocurrencies in this way, which gives them a strong incentive to try again. 

Marco Cavicchioli

Born in 1975, Marco has been the first to talk about Bitcoin on YouTube in Italy. He founded and the Facebook group" Bitcoin Italia (open and without scam) ".

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