Cayman Islands headquartered crypto exchange Bitmart confirmed overnight that hackers stole at least $150 million from its platform.
In a memo to customers, the crypto exchange said that assets were taken from two “hot wallets,” one hosted on the Ethereum blockchain and the other on the Binance Smart Chain.
A hot wallet is an easily accessible storage facility on a crypto exchange that is more convenient for customers as it does not have the same security checkpoints as the more secure “cold wallet.”
According to a detailed analysis report, unidentified hackers used a stolen private key to open the two wallets and remove funds.
Bitmart is planning to cover losses suffered by impacted customers. The attack once again calls into question the safety of crypto investing and the need for regulation.
What does this mean for me?
By now, seasoned crypto traders will be familiar with the defining characteristics of these instruments. They are highly volatile and can be traded on margin, meaning that traders can make handsome profits, or suffer significant losses.
The market is not regulated, so Bitmart is not compelled to compensate customers for any losses, although they are doing so in this case. Affected traders should be grateful they are getting their investments back this time.
Crypto traders need to be aware of the pitfalls of the industry and should craft well-researched strategies that they execute consistently if they are to make the most of their crypto portfolios.
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