Hackers are always up to something, especially when something is worth stealing.
These malicious actors can tinker with security systems and breach firewalls, slip in between the cracks, and cover their tracks when they are at it. And this time, hackers have stolen $196 million worth of cryptocurrency from cryptocurrency trading platform BitMart.
BitMart that confirmed the hack, with founder and CEO Sheldon Xia calling it "a large-scale security breach."
While the exchanged explaining that the affected include Ethereum and Binance smart chain "hot wallets," which are only a "small percentage" of the exchange's assets. The statement went on to say that all other wallets were "secure and unharmed."
In all, BitMart said that the hackers withdrew about $150 million in assets.
Total estimated loss: ~200M (~100M on @ethereum and ~96M on @BinanceChain ). (Previously we only counted the loss on @ethereum). And here is the list of affected assets/amounts on @BinanceChain pic.twitter.com/cXXApDFtd7
— PeckShield Inc. (@peckshield) December 5, 2021
It was Peckshield that first to notice the breach on Saturday, when the team found that one of BitMart's addresses showed a steady outflow of tens of millions of dollars to an address which Etherscan referred to as the "BitMart Hacker."
The blockchain security and data analytics firm estimated that the loss is closer to $200 million.
$100 million came from various cryptocurrencies on the Ethereum blockchain and another $96 million from coins on the Binance smart chain. The hackers made off with a mix of more than 20 tokens, including Shiba Inu, Binance Coin, BabyDoge, Saitama, Dogelon Mars, Crypto.com, Decentraland, and Akita Inu.
The most popular meme coin, Dogecoin was not included in the list of stolen assets.
Following the hack, BitMart said that all withdrawals had been temporarily suspended until further notice.
The exchange said that the methods the hackers used were unclear, but what happened after the breach was pretty straightforward.
The hackers initiated a classic case of "transfer-out, swap, and wash," in which they used the decentralized exchange aggregator known as '1inch' to exchange the stolen tokens for Ether.
From there, the coins were deposited into a privacy mixer known as Tornado Cash.
Cybercriminals who stole cryptocurrencies often mix or use tumbling services to cover their tracks and make the money harder to trace.
This way, even though the blockchain is public and anyone can see the money flow, the cybercriminals can make it extremely difficult for investigators to trace transactions to their ultimate destination.
BitMart is a cryptocurrency exchange that offers a mix of transactions, leveraged futures trading, as well as lending and staking services.
The exchange that was established in 2017, claims to have more than 9 million users, and listed Alexander Capital Ventures and Fenbushi Capital among its investors.
The 24-hour trading volume on BitMart far exceeded $1 billion, making the platform among the largest exchange by daily trading volume.
And in this incident, the cryptocurrencies that were affected were "hot", meaning that the wallets that contained the cryptocurrencies were connected to the internet.
Hot wallets allow the owners to access their assets, allowing them to spend or manage their cryptocurrencies. The trade-off for the convenience is the potential exposure to bad actors.
The opposite of hot wallets, are cold wallets that are not connected to the internet.
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
Further reading: Hacker Stole $610 Million In Cryptocurrency, Kept Some, And Returned Most Of It
