BitMart to Compensate $200 Million Hacking Victims

Earlier this week, crypto trading platform BitMart revealed that there had been a hack related to one of their “ETH hot wallets and one of [their] BSC hot wallets” in what they referred to as a “large-scale security breach”. Hackers accessed Ether and Binance wallets on the BitMart exchange platform and executed the token transfers which BitMart initially valued at $150 million, however, an analysis by blockchain security and data analytics firm Peckshield revealed the hack had resulted in losses closer to $200 million.

After funneling the coins out of the wallets, hackers were able to use a decentralized exchange aggregator to convert the variety of tokens – which included the Binance coin, Safemoon, and Shiba Inu -into ETH. In order to avoid the identification, the group then deposited the ETH into a privacy mixer which makes it nearly impossible for law enforcement, or BitMart, to track the hackers down.

Subsequently, BitMart announced that they will be compensating victims for their losses. In a tweet published on his official account, BitMart CEO Sheldon Xia stated“BitMart will use [their] own funding to cover the incident and compensate affected users”. Xia then went on to add, “We are also talking to multiple project teams to confirm the most reasonable solutions such as token swaps. No user assets will be harmed”.

Just last week, BitMart had closed a Series B funding round led by Alexander Capital Ventures that valued the exchange at $300 million; it is presumed that BitMart is to reportedly use this funding to compensate wallets that were affected by this hack. Despite the fact that they would be dipping into their own pot to refund these lost tokens, consumer confidence and security is priceless in the long run, particularly when considering the sheer amount of crypto exchange platforms entering the space as of late.

Speaking on the cause of this hack, Xia had revealed that the “security breach was mainly caused by a stolen private key that had two of [their] hot wallets compromised”.

BitMart is not the only platform that has been subject to hacking. Back in August, the DeFi platform Poly Network lost nearly $600 million in what was seen as the biggest hacking-related crypto theft of all time. In a strange twist of events, the funds were later restored by the hackers who claimed that they had merely stolen them in order to shed light on the flaws in Poly’s security systems.

Despite the fact that they are built to be more secure, the cryptocurrency markets are lush with scams and possible hacks. If you wish to ensure that your cryptocurrency stays safe, there are some steps you can take in order to up your security features. One such way is to store your cryptocurrencies in what is referred to as a “cold wallet” which is an offline wallet that is not connected to the internet except manually and while it is being used. This greatly reduces the chances of it being accessed remotely, particularly when it is offline. For more tips and tricks on how to keep your cryptocurrencies secure, be sure to read our thorough explainer on how to avoid crypto scams and rug pulls.

Be sure to also watch our video on three ways you can avoid crypto scams!

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