Another top crypto exchange just got breached

Crypto exchange platform Bitmart identified a large-scale security breach, with hackers withdrawing assets valued approximately US$150 million.
6 December 2021

A bitcoin symbol at a cryptocurrency exchange branch near the Grand Bazaar in Istanbul.(Photo by Ozan KOSE / AFP)

  • Crypto exchange platform Bitmart identified a large-scale security breach
  • The hackers were able to withdraw assets of the value of approximately US$150 million
  • Increasing crypto hacks are a reason why some countries are banning and tightening crypto regulations 

Crypto exchange platforms are used to facilitate the trading of cryptocurrencies. This includes buying and selling crypto assets, as well as trading them for fiat currency. As an intermediary between buyers and sellers, the crypto exchange would be home to copius amounts of data, especially funds and information of their customers.

So, it’s not surprising that crypto exchanges are often targeted by cybercriminals. Some of the recent crypto exchange hacks including the one experienced by Coinbase Global Inc. The crypto exchange hack saw the information of at least 6000 customers compromised.

In Japan, hackers drained Japanese cryptocurrency exchange Liquid, for about US$97 million worth of Ethereum and other digital coins. Liquid had to suspend trading on their platform and move the assets to more secure wallet storage.

But the biggest, and probably the most confusing crypto exchange hack, occurred when crypto platform Poly Network was hit by a major attack. The hacker was able to steal more than US$600 million worth of tokens but in a strange twist, returned almost all of the assets after a few days. Not only did Poly Network grant the hacker a US$500,000 bounty for helping them identify a flaw in their systems, but they also even offered him a job as chief security advisor.

Alas, not all crypto hacks have fairy tale endings. Barely a few days after announcing a halt to accepting new account registrations from users in mainland China, crypto exchange Bitmart identified a large-scale security breach related to one of its ETH hot wallets, and one of its BSC hot wallets.

According to a statement by Bitmart  also tweeted by founder Sheldon Xia, they are still concluding the possible methods used by the hackers. The hackers were able to withdraw assets of the value of approximately US$ 150 million.

“The affected ETH hot wallet and BSC hot wallet carry a small percentage of assets on Bitmart and all of our other wallets are secure and unharmed. We are now conducting a thorough security review and we will post updates as we progress. At this moment we are temporarily suspending withdrawals until further notice. We beg for your kind understanding and patience in this situation,” the statement said.

Bitmart offers a mix of spot transactions, leveraging future trading as well as lending and staking services. CoinGecko ranks Bitmart as one of the top centralized crypto exchanges by volume.

Separately, a new report by Elliptic, a firm that tracks movements of funds on the digital ledgers that underpin cryptocurrencies, highlighted that decentralized finance (DeFi) users and investors have suffered more than US$12 billion in losses as a result of theft and fraud. These losses are picking up pace, with losses totaling $10.5 billion in 2021 to date, up from US$1.5 billion in 2020.

At the same time, the growth in the use of DeFi over the past two years has been staggering. In fact, the total capital locked-in for DeFi services has grown by over 1,700% to US$247 billion in the past year alone. While the figures are promising signs for investors, the reality is, the losses are also high.

With increasing crypto hacks globally, it is also one of the reasons why some countries are looking to create more regulations for cryptocurrencies. In Asia, China has already banned crypto trading while India is also looking to tighten its crypto regulations, intending to secure and protect its citizens.