BitMart Hack Results in $150 Million Loss

  • By Steven
  • Aug 10, 2022

BitMart, a cryptocurrency trading platform, has been in the news for all the wrong reasons. BitMart suffered a nasty digital security breach that prompted a corrective update. However, the defensive action proved too little too late as the crypto trading site suffered a financial loss of several hundred million dollars.

What Caused the Breach?

The data breach is the result of a stolen private key. The key in question contained two of the company's hot wallets, ultimately leading to a data compromise and ensuing financial loss. The hackers stole a combination of 20 tokens, transferred them out, swapped them, and washed the digital currency.

According to a CNBC report, the digital miscreants responsible for the offensive relied on Tornado Cash and 1inch to exchange the stolen crypto for other types of crypto, making it challenging to track the funds. Tornado Cash is a privacy mixer that prevents money tracing. The aggregator 1inch was used to transfer the stolen digital currency for ether.

How Much Money Was Stolen in the Attack?

The attack caused the loss of more than $150 million of crypto. However, a report from PeckShield stated that BitMart's losses from the attack amounted to just under $200 million. All in all, about half of the losses were in myriad cryptocurrencies stemming from the Ethereum blockchain. The rest of the money stemmed from Binance Smart Chain currencies.

How did BitMart Respond to the Attack?

BitMart responded by pausing customer crypto withdrawals. The company also took steps to bolster the security of the Binance Smart Chain and Ethereum hot wallets. It is interesting to note the company's executives tapped into their internal funds to cover the cost of the attack and offset customer losses.

Why was BitMart Targeted?

It appears as though the blockchain technology that underlies bitcoin and similar cryptocurrencies is relatively secure. However, the same cannot be said of exchanges where people trade, buy, and sell a wide range of cryptocurrencies. Exchanges cannot be trusted in the same manner customers trust traditional banks simply because the crypto industry lacks the same regulations as the banking industry.

Furthermore, crypto exchanges are not FDIC insured. Therefore, assets lost on crypto exchanges are unlikely to spur financial compensation from the company itself, even if it acted negligently.

What Role did Hot Wallets Play in the Breach?

The Binance Smart Chain and Ethereum hot wallets involved in the data breach were compromised, yet they only contained a small percentage of the total assets on the exchange. In the context of crypto, the word "hot" and "cold" refer to a wallet's connection to the web versus the lack of connection, respectively.

Where Does This Hack Rank in the Context of Crypto Attacks?

This attack is significant in the grand scheme of things as it is only outranked by five similar attacks in terms of aggregate value lost. However, as time progresses, the number of crypto hacks and other web-based attacks continues to increase. If you have not taken recent steps to fortify your digital security, do so now before you become the next cybersecurity statistic.

About the Author
IDStrong Logo

Related Articles

Instagram Vulnerability Allowed Hackers Access to Control Your Phone

Security experts Check Point Research discovered a critical vulnerability while examining Instagra ... Read More

Alien Malware Infects More than 226 Mobile Apps and Steals Bank Data

As reported on September 24, 2020, by ZDNet and ThreatPost, a new strain of malware named “Alien ... Read More

Universal Health Systems Hit by Ransomware Attack

Universal Health Systems (UHS), a Fortune 500 company owning more than 400 hospitals across the co ... Read More

Exchange Server Bug Exposes a Big Risk to Hackers

Months after Microsoft released a patch to fix a serious flaw in MS Exchange Server, more than 61% ... Read More

Clients’ Bank Data Exposed in Blackbaud Ransomware Attack

Blackbaud software was victim to a ransomware attack last May, and new information suggests that c ... Read More

Latest Articles

Nelnet Data Breach Impacts 2.5 Million Students

Nelnet Data Breach Impacts 2.5 Million Students

Nelnet is a student loan service based out of Lincoln, Nebraska. Recently, it suffered a data breach that revealed the personal information of over 2.

Facebook has Been Receiving a Plethora of Medical Information

Facebook has Been Receiving a Plethora of Medical Information

In early June of 2022, the nonprofit news reporter The Markup discovered that an ad-based service, Meta Pixel, was being used by 33 of the top 100 hospitals in the US. Meta is now being sued for allegedly sending sensitive medical information to Facebook, along with two of the involved hospitals.

What is the Geek Squad Email Scam and How to Avoid It

What is the Geek Squad Email Scam and How to Avoid It

Computers are, arguably, one of the most essential items necessary for life in modernity. Through them, not only can we be entertained, but we can be informed or critiqued.

Featured Articles

How to Buy a House with Bad Credit

How to Buy a House with Bad Credit

Buying your own home is the American Dream, but it might seem out of reach to those with bad credit. However, the good news is, if your credit is less than perfect, you do still have options and in most cases, can still buy a home.

How Secure Is Your Password? Tips to Improve Your Password Security

How Secure Is Your Password? Tips to Improve Your Password Security

Any good IT article on computers and network security will address the importance of strong, secure passwords. However, the challenge of good passwords is that most people have a hard time remembering them, so they use simple or obvious ones that pose a security risk.

Top 10 Senior Scams and How to Prevent Them

Top 10 Senior Scams and How to Prevent Them

Senior scams are becoming a major epidemic for two reasons. First, seniors often have a lot of money in the bank from a life of working hard and saving.

Free Identity Threat Scan
Instantly Check if Your Personal Information is Exposed
All fields below are required
Please enter first name
Please enter last name
Please enter a city
Please select a state
Please enter an email address