Hackers drain nearly $200 million from major crypto exchange

On Monday, crypto exchange BitMart pledged to compensate users who lost money after a major “security breach” saw hackers steal $196 million worth of cryptocurrency.

BitMart was hacked on Saturday in what the crypto-savvy have described as one of the most devastating centralized exchange hacks to date. 

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A tweet from security analysis firm PeckShield was the first to draw attention to the hack on Saturday night, when one of BitMart’s addresses showed outflows of entire token balances, some of them worth tens of millions of dollars.

PeckShield estimated the losses at around $100 million in various cryptocurrencies on the Ethereum blockchain and at $96 million on the Binance Smart Chain.

BitMart initially claimed that the outflows were routine withdrawals, slamming reports of the hack as “fake news.” However, hours later, CEO Sheldon Xia confirmed the outflows had indeed been a hack. They had resulted, he said, from a “security breach” caused by a stolen private key that had seen two of BitMart’s hot wallets compromised.

2/4 BitMart will use our own funding to cover the incident and compensate affected users. We are also talking to multiple project teams to confirm the most reasonable solutions such as token swaps. No user assets will be harmed.

— Sheldon Xia (@sheldonbitmart) December 6, 2021

On Monday, Xia tweeted that the exchange had completed an initial security check and identified the affected assets. He announced that there were plans underway to compensate those who had lost tokens out of BitMart’s own funds. He said he was “confident” the exchange would relaunch operations with deposits and withdrawals as of December 7.

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