BitMart suspends withdrawals following hack

Cryptocurrency
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Hackers managed to get away with at least $150m in cryptocurrencies

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6 December 2021 | 0

Cryptocurrency trading platform BitMart has temporarily suspended all withdrawals following a security breach that saw hackers steal at least $150 million from users’ wallets.

Blockchain security and data analytics provider Peckshield was the first to report the incident after it spotted an outflow of cryptocurrencies through blockchain transaction tracker Etherscan.

BitMart, which describes itself as “the most trusted crypto trading platform”, confirmed a “large-scale security breach” in the early hours of Sunday morning, with founder and CEO Sheldon Xia estimating the stolen assets at $150 million.

 

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However, according to Peckshield’s calculations, the loss could have been closer to $200 million, of which $100 million was formed from various cryptocurrencies on the Ethereum blockchain, with a further $96 million from coins on the Binance smart chain.

The company didn’t specify how many customers were affected by the theft and wasn’t immediately available for comment.

On Monday, Xia announced that BitMart had “completed initial security checks and identified affected assets”, adding that the breach had been “caused by a stolen private key that had two of our hot wallets compromised”.

BitMart is scheduled to resume withdrawal functions on Tuesday and will use its “own funding to cover the incident and compensate affected users”.

However, Ilia Kolochenko, founder of ImmuniWeb and a member of the Europol Data Protection Experts Network, said that it’s unlikely that the victims of the breach will get back the entirety of the stolen funds.

“Cyber insurance will unlikely cover such losses. The victimised customers of Bitmart may try to recover their losses in court, but their chances to prevail are pretty low, while the eventual chance to get all their money back borders on zero,” he told IT Pro.

Kolochenko described such investigations as “costly and complex”, blaming the issue on the “turbulent and competitive” cryptocurrency market, “where few players can afford adequate investment into their cybersecurity programmes” and data protection isn’t the first priority.

He called on regulators to “start treating crypto businesses as financial institutions by imposing much stricter data protection rules”.

“Otherwise we will see many more hacks like this one,” he added.

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