BitMart’s CEO, Sheldon Xia, stated that the crypto exchange will repay users who were affected by a large-scale hack on Saturday night from its own funds.
On Monday morning, Xia confirmed the situation was triggered by a stolen private key to two of BitMart’s hot wallets through Twitter.
“BitMart will use our own funding to cover the incident and compensate affected users,” wrote Xia. “We are also talking to multiple project teams to confirm the most reasonable solutions such as token swaps. No user assets will be harmed.”
BitMart experienced “a large-scale security breach,” according to the official notice, which resulted in the exchange’s Ethereum (ETH) and Binance Smart Chain (BSC) hot wallets being compromised.
Hot wallets, in contrast to so-called cold wallets, which are typically hardware devices such as USB drives designed to keep cryptocurrencies offline, are connected to the internet, allowing for faster and easier transactions.
However, the simplicity of using hot wallets comes at a cost: they are more susceptible to internet attacks. According to BitMart’s release, hackers made off with around $150 million in stolen cash.
According to Peckshield, a blockchain security business, the overall anticipated loss is closer to $200 million, with about $100 million in Ethereum-based assets and $96 million in BSC-based assets taken.
Breaking down the BitMart hack
Peckshield discovered the breach on Saturday night, indicating tens of millions of dollars outflow from one of BitMart’s accounts.
The hacker transferred the stolen tokens through decentralized exchange (DEX) aggregator 1inch and used Tornado Cash, a mixing service for the Ethereum blockchain, to disguise their identity, according to the experts.
“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,” BitMart said in a statement.
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