BitMart to Reimburse $196M Hack Victims

BitMart's CEO has promised to compensate victims of its recent $196 million hack.

Shutterstock cover by KonstantinChristian

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BitMart hopes to resume withdrawals Tuesday, despite losing $196 million in a crypto hack.

BitMart Will Compensate Hack Victims 

BitMart says it’s going to reimburse users affected in its recent hack. It will also resume normal operations from Dec. 7.

Having suffered a $196 million hack, BitMart, a Cayman Islands-based centralized exchange, announced resuming its normal operations on Tuesday.

The Cayman Islands cryptocurrency exchange suffered a major hack over the weekend when the private key to two of its hot wallets was compromised. The wallets were linked to Ethereum and Binance Smart Chain; security firm PeckShield found that about $100 million worth of crypto assets was lost on Ethereum, and a further $96 million on Binance Smart Chain.

The exchange has finished its initial security checks and identified affected assets, and since confirmed that normal operations will resume on Tuesday.

In a statement, the exchange claimed that the total sum lost constituted only a “small percentage of assets on BitMart,” before noting that other wallets were “unharmed.”

BitMart founder and CEO Sheldon Xia has since pledged to compensate users from BitMart’s own funds. In a Monday tweet, he wrote: “BitMart will use our funding to cover the incident and compensate affected users.”

Centralized crypto exchanges like BitMart usually manage two types of wallets: hot and cold. Hot wallets are connected to the Internet and allow for fast deposits and withdrawals. However, as they are exposed to the web, they are often prone to hacks. A Japanese exchange called Liquid suffered a hack worth $97 million in similar circumstances to BitMart in August.

The DeFi space has also seen a number of major attacks in recent months. The latest big one happened only two days before the BitMart incident, when unknown hackers inserted a malicious script into BadgerDAO’s frontend website to trick users into agreeing to send their funds to the hacker’s wallet. The losses amounted to about $120 million, making it one of the biggest DeFi exploits to date.

Disclosure: At the time of writing, the author of this feature owned ETH and several other cryptocurrencies. 

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