The BitMart hacker also used a crypto mixer to “transfer-out, swap, and wash.”
Crypto exchange BitMart has been hacked and lost nearly $200 million worth of crypto assets in a hot wallet compromise.
Cybersecurity company PeckShield revealed the hack and estimated a loss of around $100 million on Ethereum and $96 million of Binance Smart Chain.
Initially, PeckShield estimated that only $100 million were lost as it only calculated the Ethereum loss.
It later revised the tally to $196 million precisely, after adding in the loss of $96 million on Binance Smart Chain.
BitMart founder and CEO, Sheldon Xia, later confirmed the hack.
“At this moment we are temporarily suspending withdrawals until further notice. We beg for your kind understanding and patience in this situation. Thank you very much”, he further explained.
The flow chart above shows the use of a crypto mixer called Tornado to obfuscate the transaction data and launder the blacklisted crypto assets through the “transfer-out, swap and wash” strategy, as described by PeckShield.
Xia assured the BitMart community that all the other funds and wallets are safe. The hacked ETH and BSC hot wallets had only a small portion of the total reserves of the exchange.
Neither BitMart nor PeckShield has released any report on the hack, as of now.
Any new technology initially comes with its own flaws. It takes time to correct the flaws and make the technology robust enough to withstand any security gaps. At the same time, the users should also periodically assess the risk. Self-custodial wallets are the way to go if anyone wants to have a safer place for digital assets.
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