BitMart, a cryptocurrency trading platform, has announced that it will use its own funds to compensate victims of a large-scale security breach in which hackers stole up to $196 million.
According to BitMart, hackers took around $150 million in assets. Peckshield, a blockchain security and data analytics firm that originally reported the theft, believes the damage to be closer to $200 million.
BitMart said in a statement released on Monday morning that it has undertaken basic security tests and recognized the assets that were compromised. The security breach was primarily triggered by a stolen private key, which damaged two of the exchange’s hot wallets, but other assets were “secure and unscathed.”
According to the business, the compromised Ethereum and Binance smart chain “hot wallets” only held a “tiny fraction” of the exchange’s assets. Cryptocurrency can be kept “hot,” “cold,” or anywhere in between. A hot wallet is one that is linked to the internet that allows users to access and spend their cryptocurrency with relative ease. The cost of convenience is the risk of being exposed to dangerous actors.
PeckShield was the first one to identify the breach on Saturday, stating that one of BitMart’s addresses indicated a consistent outflow of millions of dollars to an address known as the “BitMart Hacker” by Etherscan.
BitMart lost roughly $100 million in various cryptocurrencies on the ethereum blockchain, according to PeckShield, and another $96 million in coins on the Binance smart chain. Binance currency, safe moon, and Shiba Inu were among the more than 20 tokens taken by the hackers.
BitMart offers a variety of services, including spot transactions, leveraged future trading, financing, and staking. According to CoinGecko CEO Bobby Ong, its trade volume has dropped “a lot” since the breach. Individual exchanges supply volumes to Ong’s platform, which he reports on.
While some exchanges buy insurance for their crypto assets, Ong claims that this is not a standard practice across the sector.
On Tuesday, December 7, the business anticipates “deposit and withdrawal services to progressively commence.”
This is the latest breach in a series of hacks in various cryptocurrency exchanges. The lack of security and vulnerability of crypto poses a great threat to cybersecurity and public assets. India is seeking a blanket ban on private cryptocurrencies. The Bill is all set to be heard by the cabinet next week. The threat to cybersecurity is a major concern globally.