BitMart said that the hackers targeted two of their hot wallets, i.e., wallets connected to the internet, which contained “a small percentage” of its assets. While the exchange said that the hackers withdrew approximately $150 million worth of crypto assets, security firm PeckShield Inc. believes it to be closer to $200 million. The firm said that the hackers stole a mix of over 20 cryptocurrencies. It estimates that BitMart lost $100 million worth of tokens on the Ethereum blockchain, and $96 million from those on the Binance Smart Chain.
Details of the BitMart Security Breach
BitMart is one of the most popular centralized crypto exchanges in the world. It offers a variety of services such as spot transactions and leveraged futures trading. It also offers lending and staking services. The exchange stated that hackers stole tokens from one of its Ethereum hot wallets and one of its Binance Smart Chain hot wallets. The stolen tokens include Binance Coin, Safemoon, and Shiba Inu. It added that the compromised wallets held a small portion of its assets and that its other wallets are “secure and unharmed.” In its statement, BitMart added that it has temporarily suspended all withdrawals until further notice. It also said it was conducting a thorough security review of the incident.
Security Experts Say Bitmart Hackers Will Be Hard to Trace
In its statement, BitMart said it was “still concluding” how the hackers breached its hot wallets. However, after the breach, the hackers used a technique to make the funds harder to trace, despite being on a public blockchain. PeckShield calls it a classic case of “transfer out, swap, and wash.” After withdrawing the funds, the hackers exchanged it for ether on 1inch, a decentralized exchange aggregator. Next, they deposited the ether tokens in a privacy mixer called Tornado Cash. Mixers or tumblers work by “mixing” crypto funds in a larger pool of crypto assets. This process de-links the transaction trail, making it harder to trace where the funds ultimately end up.
Major Cyber Incidents on Crypto Exchanges in 2021
The BitMart hack is the latest in a line of cyber incidents on crypto exchanges in 2021. In August, a hacker stole $600 million worth of coins from Poly Network. The incident was the largest ever recorded crypto hack in history. Thankfully, and rather surprisingly, the hacker returned the stolen funds shortly after. Around the same time, Japanese crypto exchange Liquid, and CREAM Finance, lost tens of millions of dollars each in separate cyber incidents.
