CoinMarketCap Academy takes a look at the Bitmart Hack, where the hacker stole about $200m worth of token, affecting the SafeMoon investors the most. Learn more!
With the advancement of technology, the way we work, communicate, trade, and live have been changed significantly within a decade. Now we have entered the era of cashless payments where people avoid the traditional cash payment methods.
Today, many companies are looking into mechanisms to integrate blockchain-based transactions into their systems to ensure the safety of their client's data. Cryptocurrency can be considered as the newest development in the field of investments due to the enhanced security and safety it offers to its users. However, even technology as advanced as blockchain is susceptible to security breaches.
In this article, we are going to discuss one of the biggest crypto hacks in the crypto industry, which is the ‘Bitmart Hack’.
What Is the Bitmart Hack?
Bitmart is one of the most trusted cryptocurrency trading platforms. BitMart consists of advanced architecture with strong security features which increase its scalability and stability. Unfortunately, on 4th December 2021, the exchange experienced a large-scale security breach, where the hackers withdrew around $150m worth of tokens from their hot wallets. The hack was first confirmed by a third-party security firm, Peckshield.
When Did the Bitmart Hack Happen?
Recently, on 4th December 2021, a third-party security firm, named Peckshield, noticed a breach in the BitMart security of around $200m. They observed an unidentified transaction of $10 million to an address which the scanner referred to as the ‘BitMart Hacker’. According to the Peckshield security firm, it is a straightforward case of transfer, swap, and wash hacking. Whereas the crypto trading platform, BitMart, has also announced that they will reimburse the amount of this large-scale security breach with their own money.
Who Was Involved in the Bitmart Hack?
BitMart had experienced a large-scale security breach, the hackers had withdrawn around $200m worth of tokens. The hack was first confirmed by a third-party security firm, Peckshield.
According to Peckshield BitMart lost around $100m worth of tokens based on the Ethereum blockchain. On the other hand, approx $96m loss of tokens is observed that are based on Binance Smart Chain. Still, it is unidentified who is behind this huge security breach as the investigation is going on.
In the first official statement after the hack, BitMart announced that their team checked the security system in place and identified the affected assets. It further mentioned that the hackers stole their private key linked to two of their hot wallets, whereas other assets are safe.
How Did It Conclude?
During investigation, it was found that it is a straightforward case of transfer, swap, and wash hacking, according to the security firm, Peckshield. Other investigation reports mentioned that the affected hot wallets were carrying only a small percentage of the company’s assets.
Moreover, it was found that after transferring the funds from the BitMart, the hackers used a decentralized exchange platform, known as 1inch, to exchange stolen tokens with Ether. These coins were then deposited into an address using a coin mixer called Tornado cash. Therefore, it became impossible to trace the receiving address.
Impact of the Bitmart Hack on the Crypto Community
After the BitMart hack, the trust level of the investors shook dramatically. Due to this reason, the trading platform turned towards an offline storage system where up to 54% of its tokens are stored in cold wallets.
Authorities all over the worlds are making continuous efforts to stabilize the cryptocurrency market and make the security systems strong. Another point to note is that even though blockchain is secure, the exchanges are not. Therefore, investors should use cold wallets to keep their funds safe instead of relying on the vulnerable security system of crypto exchanges.
How Can We Protect Cryptocurrency Exchanges From Hackers?
Measures should be take on both individual and exchange level to protect funds from crypto scams and hacks. For individuals, some practices are recommended to protect themselves from loss. The first, most important practice is to make the right investment strategy.
As diversification is a key element of a successful investment strategy. The other key practice is to do a thorough research. Before investing in any token or cryptocurrency, it is suggested to read its whitepaper and check the legitimacy of the team. This provides you with a surety of investing in a reliable project that has real-world applications. While some cryptocurrencies might seem lucrative due to their incredibly articulate marketing campaigns, they can be a part of a mega rug-pull plan.
Decentralized means that a system is not relying on any centralized authority to function; the whole system can be accessed across the world from any device. Cryptocurrency is not legal in many countries, so before investing in any cryptocurrency, you must check the crypto-related laws in your jurisdiction to avoid any inconvenience. Also, it is advised to enable the 2FA system if you like to keep your funds on an exchange (also choose the top exchange).
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