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Deribit Hacked For $28 million

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@chekohler
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In today's edition of YIYL, (You Invest, You Lose), it looks like hacks have not stopped with Hacktober and we're going into November with more companies or smart contracts handing over money to the wrong people.

This time, it comes from a centralised exchange and again another reason to never leave your funds with an exchange, but you're not going to listen until you get burned. Crypto exchanges are ALWAYS going to be a point of attack, because they are constantly moving funds in and out of their system. The more tokens they support the more complex it becomes and security will lapse, it's just the nature of the game.

Don't believe me? How many bitcoin-only exchanges are hacked every year? How many bitcoin-only wallets are hacked? It's when you fuck around with shitcoins that you land yourself in hot water. This is a rule not only retail will have to learn but businesses in the space, who are all looking to maximise profits.

Deribit is a Panama-based exchange that offers you shitcoin trading along with options and futures trading, so you can pretty much go degen your tits off at these offshore casinos.

Offshore but out to lunch

Deribit has been around for a while, launched in 2016, and has not been without its headlines, you can simply hit the search engines and do your research, but I won't go into that now. We will tackle today's drama which saw the major crypto exchange suffer massive losses. According to reports, from Deribit, so we just have to take their word for it. A hot wallet was compromised resulting in a $28 million theft.

The hack is isolated to their BTC, ETH, and USDC hot wallets, but how can that be if bitcoin and ETH don't run on the same rails, why would you have a single hot wallet for multiple assets, that wouldn't make much sense and if they did, man is that shoddy practice.

No details have been released on how the keys to the wallet were exposed only that the hacker made 691 BTC and 9,111.59 ETH from the hack, with the USDC nabbed being quickly converted to Ethereum. The funds are now held in two wallets across Bitcoin and Ethereum.

You can check out the wallets here

One fail to rule them all

In response to the breach, the exchange halted withdrawals to perform security checks but urged that customer funds were safe and that the loss was covered by company reserves. So even if you had fuck-all to do with this or not even using those assets you were now fucked and cannot use your funds, and this again is the issue with using a multi-currency exchange, the commingling of assets means everyone goes down with the ship.

https://twitter.com/DeribitExchange/status/1587701883778523136

Compounding a year of pain

It hasn't been a good year for the company and this hack is but fresh salt in the wounds so we'll have to see if they can recover. Deribit is also among the primary creditors of failed crypto hedge fund Three Arrows Capital, which defaulted on an $80 million loan from the exchange.

It's not easy for a company to lose a total of $106 million in a short space of time and with trading vollumes down 70 - 90% on exchanges its not as if there is a lot of money to be made right now short of people trading against them on leverage and blowing up their accounts.

Not your keys

If you have not learned the lesson of not your keys not your coins, then I have very little hope that you will and you simply need to accept that its only a matter of time before you become one of these reports.

I can't help you, I can't save you only you can do that.

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