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Crypto exchange BitMart confirms hack resulting in loss of $150M
- max_ 5y agoI remember back in the day (2010's) a hack would trigger gigantic price drop. It's good to know that this does not affect the price much now days.
- nine_zeros 5y agoHacks and scams are priced in. Jk but not really joking! This whole thing is utter madness.
- ronsor 5y agoThe great thing about crypto exchanges (and other sites that hold crypto for you) is that they're self-paying bug bounties.
- klntsky 5y agoCrypto does not really provide anything new here. You can say that about traditional banking systems as well.
- duxup 5y agoI wonder if a completely Wild West really makes for better security… doesn’t seem like it so far. Probably a good lesson in there about incentives and consequences maybe not always going where you might think.
- rsynnott 5y agoI mean, did anyone ever suggest it would? I don't think even the biggest bitcoin enthusiast would claim that these dodgy exchanges were especially secure.
- monkeybutton 5y agoThe invisible hand of the free market is in your back pocket lifting your wallet.
- 0xb0565e486 5y agoAnything that holds value is a self-paying bug bounty.
- JumpCrisscross 5y ago> Anything that holds value is a self-paying bug bounty Most valuables have means for recourse. Crypto’s pitch is that it circumvents these mechanisms.
- repomies69 5y agoI think hacking about any service will provide valuable data, which can be sold at darknet marketplaces. I read somewhere that there is a marketplace just for hacked server credentials as well.
- gruez 5y ago>Most valuables have means for recourse Most valuables? I think most financial assets have means for recourse, but if your gold bars/jewellery gets stolen, it's as good as gone.
- rsynnott 5y agoIf you have literal gold bars, they are almost certainly in an insured facility; actual risk to you, the owner of the gold bars, is limited. I mean, if you have them on your _house_ then this applies, but people typically don't.
- JumpCrisscross 5y ago> if your gold bars/jewellery gets stolen, it's as good as gone Which is why society stopped storing meaningful quantities of value in gold generations ago.
- midasuni 5y agoOne of the reasons. The ability to exchange cheaply and quickly is another reason, di visibility another one
- cinntaile 5y agoThis only makes sense for smart contract run exchanges where the code, in theory, is always right. Otherwise this is no different from any other financial hack.
- ronsor 5y agoOh, but it is, because with crypto you can simply drain the wallets anonymously. If you hack a regular bank and try to transfer the money to your accounts, you'll get caught and jailed ridiculously fast.
- ryanlol 5y agoMaybe you should try to learn about how these schemes work before making such statements? According to the FBI, BEC fraudsters took $1.8 billion in 2020 by stealing wire transfers from businesses into their own accounts https://www.ic3.gov/Media/PDF/AnnualReport/2020_IC3Report.pdf https://www.ic3.gov/Media/PDF/AnnualReport/2020_IC3Report.pd...
- brarsanmol 5y agoI'm a relative newcomer to the crypto-space so please forgive me for any errors. I see the point you are attempting to make but the number is rather useless, in the past week hackers took 20% of what was stolen by BEC in a year. And skimming through the report you sent it seems like there is a program to recover said funds that have been lost and it has an 82% success-rate.
- ryanlol 5y agoThe $1.8B only represents US losses known and properly classified by the FBI, the real number for global losses will be much higher.
- brarsanmol 5y agoAgreed, but that is simply cause-and-effect by virtue of the majority of the world using the current global financial system rather than crypto and many more hackers are targeting said folk. Either way two wrong's don't make a right, there will be losses in both systems but I would argue that storing your money with a unregulated crypto-firm would be more dangerous than with a modern-day bank. I think the main gripe that many people have including myself with crypto is that it doesn't even have the proper consumer protections so that a decent/strong chance of recovery is possible. This trend of massive amounts of crypto currency being stolen is not even a relatively recent one, see Gerald Cotten's (Quadriga) death in 2019 which resulted in $150 million in assets going missing with no chance of recovery. This reply has been a little-bit scatter-brainish, so my apologies for that.
- Ansil849 5y ago> The great thing about crypto exchanges (and other sites that hold crypto for you) is that they're self-paying bug bounties. That's a pretty crass and glib statement. So are home burglaries, I guess? Or, really, any kind of crime regarding the stealing of funds or valuables? You're basically saying 'if you find a 'bug' that lets you get money, then it's a self-paying bug bounty.' So, snatching someone's purse while they're in the toilet--boom, instant self-paying bug bounty.
- eatYourFood 5y agoDo you even know what a joke is?
- Ansil849 5y agoDo you know what insensitivity is? Would you make the same joke about any of the other examples I mentioned?
- eatYourFood 5y agoNo I wouldn’t because they aren’t topical to a website devoted to talking about dev and tech. It’s a joke, sensitivity isn’t always a priority, you don’t have to like it.
- dmingod666 5y agoIf explicitly people want to be independent of the regulated financial sector and sign-up to take these risks you cannot claim "oh, I've been wronged, pity me" -- sure they deserve justice, but this happening to them is part of the risk reward of working with crypto..
- folli 5y agoI'd wager that you shouldn't put any money you can't afford to lose into crypto, so your other examples are not really comparable.
- 5y ago
- hawk_ 5y agoUnless it's an inside job going high up.
- foobiekr 5y agoInsider threat is a part of security considerations.
- humaniania 5y agoExcept these people can create their own bugs and rob their own clients and call it a hack and nobody can do anything about it because they're off shore and unregulated. You'd have to be pretty dense to put any money on the unregulated exchanges.
- whiskyant 5y agoYeah, what's the motivation for so many people going to these unregulated exchanges when there's so many regulated ones (or at least larger ones, I've never even heard of BitMart)? Is it to trade coins/tokens that aren't normally listed?
- deleted 5y ago[deleted]
- arcticbull 5y agoAt least in the US, exchanges aren't really regulated. Not as broker-dealers, anyways, in the same way a Fidelity or Schwab is regulated. They're regulated as money services businesses and money transmitters, a much weaker form of regulation designed explicitly to work around the "onerous" regulations in the rest of the system.
- xwolfi 5y agoYes, to speculate on a ponzi they know will fall but they think they can time. In normal finance, it s just too crowded to make the same amount of margin short term.
- tim333 5y agoI had a little bit in BitMart. It was to speculate on some iffy coin that was only listed there. With hindsight maybe not wise.
- joenathanone 5y agoThis is how banking regulations happened, once enough people lost their money, the law had to step in.
- throw_m239339 5y ago> This is how banking regulations happened, once enough people lost their money, the law had to step in. Technically crypto corporations are already regulated the same way banks and financial businesses are. It's just that most of these exchanges exist outside US jurisdiction, and will often not accept US customers.
- papito 5y agoThere was an article in the NYT literally a few days ago about how Kyiv, Ukraine has become an absolute unregulated wild west of crypto.
- raesene9 5y agoWell they'll pinkie swear they don't take US customers, whilst ignoring VPNs and other mechanisms of appearing not to be in the USA, at least...
- jl2718 5y agoMy concern is that “the law” is incompetent in this domain.
- jspaetzel 5y agoThe concern should be about how "the law" can't be applied here
- thehappypm 5y agoAnd possibly incompatible.
- toomuchtodo 5y agoThat’s sort of humorous that the law is the problem after $10 billion+ has been lost to crypto theft and fraud. Maybe the tech is the problem? “Maybe I’m out of touch with the rest of the developed world? Impossible, it’s everyone else demanding the enforcement of laws and regulations around value transfer, storage, and ownership who are the problem.” (Not you personally, crypto folks in general)
- gibbonsrcool 5y agoIs it possible to move bitcoin between wallets through tumbling or other means so as to make it impossible to trace back to the original wallet? If not with bitcoin alone, would it be possible going through other coins as intermediates or even ending up in another cryptocurrency so long as the trail was impossible to follow?
- throwaway248329 5y agoYes. See https://wasabiwallet.io/ https://wasabiwallet.io/
- gibbonsrcool 5y agoThanks!
- lnxg33k1 5y agoI might be too sentimental (and left leaning) but I always love a story that ends with a company losing money
- mmastrac 5y agoThe joke that crypto is a libertarian speed-run to regulated banking is somewhat apt. (I do own some crypto)
- rewgs 5y ago> libertarian speed-run to regulated banking Ha! This is perfectly put.
- jspaetzel 5y agoWhat does this mean? (Libertarian here asking)
- screye 5y agoLibertarians often stand by the 'small govt' ideal, where the ideal size of a govt. is a set of the minimum and necessary regulations needed for basic functioning. Crypto started off with zero govt, and is speed running towards the same level of regulations that banks operate under. The implication is that libertarians usual complaint about overegulation in legacy systems may be misguided, and that legacy systems are adequately libertarian. Phrased another way, the seemingly crippling regulation in legacy financial systems might actually be the 'minimum' amount of regulations necessary to enable a financial system of the size we operate in today. A more charitable reading would be that during this speed run, we reach a much earlier and smaller set of regulations that are sufficient for functionality equal to todays legacy system. Crypto can simply 'stop' adding regulation at that point, and achieve the libertarians dream of a leaner and more effective regulatory body. To some degree, it will also accomplish some of original goals of Crypto pioneers of 'low regulation' finance.
- jspaetzel 5y agoOh I see. You're saying that crypto inverts the problem libertarians want to address with the financial system. Which is nifty! I think you might find libertarians would be split about this... In my case I'm against anything that would throw out the existing system to start over from scratch, I'd rather work from the existing system and tactically remove things when they can't be justified.
- deleted 5y ago[deleted]
- JumpCrisscross 5y agoBitMart raised a Series B less than a week ago [1]. What are the odds this was an inside job? [1] https://www.marketwatch.com/press-release/bitmart-announces-series-b-raise-led-by-alexander-capital-ventures-2021-11-29 https://www.marketwatch.com/press-release/bitmart-announces-...
- deleted 5y ago[deleted]
- dcow 5y agoA BlockChain is like giving people ACH access. It’s insane to think that people are ever going to be competent and experienced enough to run their own bank. Society needs banks and regulations. This can all happen at layer-2 on top of an auditable and objective root chain. There’s a very clear analogy where everyday people interface with Eltoo “banks” existing (and regulated) on-chain providing convenient “traditional” banking services. That’s where this is all going. Crypto anarchy is a farce; don’t fall for it.
- colechristensen 5y agoACH is reversible for 30 days IIRC, though technically forever through court orders. Checks are essentially giving everyday people ACH access. You’re right and I’ve said it before, the only place crypto is going is going to be boring and indistinguishable besides minor details from traditional services.
- dcow 5y agoThere is a lot between a check and an entry in the Fed’s FTP server, notably a bank. You do not have credentials to drop your own transactions there, I think anyway XD
- papito 5y agoIt's almost like in the past the world did not have anyone who had the capability to print their own money, until the world said "this is madness, we need to put structure to this".
- kgin 5y agoImmutable ledger means nobody can fix things like this
- eatYourFood 5y agoThat’s not what ‘immutable ledger’ means. An equally weighted credit can balance out a debit on an immutable ledger. I think ledgers are generally supposed to be immutable.
- jen729w 5y agoIndeed. One corrects a mistake, one does not go back and erase it. https://www.cliffsnotes.com/study-guides/accounting/accounting-principles-i/completion-of-the-accounting-cycle/correcting-entries https://www.cliffsnotes.com/study-guides/accounting/accounti...
- raesene9 5y agomeh, there have been multiple occasions where either rollbacks have happened (maker DAO https://levelup.gitconnected.com/how-ethereum-reversed-a-50-million-dao-attack-cee528d8c030 https://levelup.gitconnected.com/how-ethereum-reversed-a-50-...) or exchanges have frozen stolen coins.
- ceva 5y agoNothing new, it happen before and it will continue to happen in future.
- wnevets 5y agocrypto exchanges and getting hacked go together like chocolate and peanut butter.
- joering2 5y agoThey always felt shaky to me. First, I was never able to transfer from/to using Litecoin. Their system said "wrong wallet format". Tech support never replied (its been probably close to a year now). It also shocked me when I wanted to remove 2FA (Google Auth). It was just not worth it considering small amount I kept. So since you cannot do it thru their portal, I opened the ticket. I never got any response but Google Auth disappeared from my account some 2 weeks later. So technically only sending email was sufficient.
- gadnuk 5y agoThis looks and smells like an inside job. Similar to: https://cointelegraph.com/news/signs-point-to-inside-job-in-upbit-crypto-exchange-hack-says-commentator https://cointelegraph.com/news/signs-point-to-inside-job-in-... or: https://dailyhodl.com/2019/04/01/inside-job-19-million-bithumb-hack-exposes-major-problem-with-cryptocurrency-exchanges/ https://dailyhodl.com/2019/04/01/inside-job-19-million-bithu... The timing seems suspicious too. When most of crypto land was crashing. My theory is that this exchange simply didn't have enough liquidity when the price crashed and they simply siphoned off the hot wallet. Lots of people wanted to sell at once. Bitmart did not have these funds. A hack at the same time is just too convenient. Watching the Ether address get drained in real time yesterday was surreal to see, like out of a movie: https://etherscan.io/address/0x4bb7d80282f5e0616705d7f832acfc59f89f7091 https://etherscan.io/address/0x4bb7d80282f5e0616705d7f832acf... This whole space is full of scams and exchanges that know everything about you in terms of what limits you've set to buy/sell, the order book, liquidity, etc. And worse, they can bet against you. Alameda admitted yesterday that they ended up profiting quite a bit being short BTC Futures (long spot) because the spread collapsed (Source: https://twitter.com/AlamedaTrabucco/status/1467219750489141250?s=20 https://twitter.com/AlamedaTrabucco/status/14672197504891412...) Only tight regulations can save investors because these "hacks" are way too common. And don't even get me started on Tether ( who conveniently printed another billion after the liquidations were done: https://twitter.com/whale_alert/status/1467155858228494353 https://twitter.com/whale_alert/status/1467155858228494353 ) Edit: rofl, they just printed another $1 billion, on a weekend! https://twitter.com/whale_alert/status/1467504581571751940 https://twitter.com/whale_alert/status/1467504581571751940 It's funny how brazen they've become. Not to mention Bitfinex and Tether CTO implying the dip was done after they printed: https://twitter.com/paoloardoino/status/1467053381072138240 https://twitter.com/paoloardoino/status/1467053381072138240 Everything in this space seems so shady. But the regulators don't seems to give a damn and keep kicking the can for eternity. It's the wild wild west out there. Moral of the story: Not your keys, not your coins. Do not keep your coins on exchanges.
- kwertyoowiyop 5y agoThe cyber equivalent of arson at a money-losing business, except no third-party is needed.
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- twright 5y agoWhat I’ve been curious about this week along with the $120 million badger DAO hack is what does one then do with these hundreds of millions? Do you launder it through NFT’s, divide it between dozens of wallets and dump it on some other exchange? If you do end up selling it can you expect legal troubles beyond taxes (e.g. the original wallet holders press charges)?
- Asparagirl 5y agoSome amount of the “hot money” — maybe not millions, that’s too unwieldy, but a good amount — can be used to purchase closed-loop gift cards, on websites that allow purchase with BTC. If those cards are from major retailers like Target or Amazon or Walmart, the cards can be used to buy merchandise which is in demand and holds its value well, most likely electronics, which can then be sold on eBay or through Buyers’ Clubs for most of their retail price. But that’s a lot of work and a lot of inventory to manage, so it’s more likely the gift cards would then be sold for about 70-80% of their face value, usually on a site like Raise.com or GiftCardGranny or similar, or even at the automated kiosks that are starting to be available in some chain stores, with the laundered funds being delivered by ACH a few weeks later.
- deleted 5y ago[deleted]
- Tenoke 5y agoIt depends. There's plenty of hacked funds that are blacklisted and useless. Otherwise you typically go through a tumbler, and then use ineficent methods to cash out like buying gold bars at markup, selling for cheap to associates who will use services like localbitcoins/localmonero/giftcard buying. If you do get caught you can definitely expect legal troubles though.
- dabeeeenster 5y agoCould you trade it for Monero, move it around in monero wallets, then trade out of Monero into ether and then fiat?
- renewiltord 5y agoI lost about $10k+ there. Lame. Now, to figure out how to mark this as a realized loss. Actually, it’s in an obscure shitcoin so it’s probably going to zero anyway haha.
- boopboopbadoop 5y agoHahahahaha
- rodmena 5y agoThese hacks won't stop until people understand they don't need to / they mustn't keep their coins in an exchange. Single click trading looks pretty appealing to many, but that's not how things should work. The whole idea of transaction fee is a corrupted idea supported by cybercriminals turned into startups.
- Daishiman 5y agoKeeping your wallet local is a gigantic PITA and most definitely something that only a minority of users want.
- SpaceManNabs 5y agoIn other news, Ledger and Trezor sold a few more units today.
- deleted 5y ago[deleted]
- Uptrenda 5y agoJust another day for Bitcoin exchanges. The sad thing is the technology exists for fully decentralized exchanges (and has for a while.) There are actually multiple 'smart contracts' that allow money to move directly between peers without the need for centralized deposits. E.g: - micropayment channels -- send money a piece at a time - cross chain contracts -- bind simultaneous release of funds to a shared secret - lightning channels -- cross-blockchain stateful commitments - reputation -- not great but can still work The order book is another part that can be decentralized. It's a little harder to do this due to the need for high speed communication but I believe its possible. Newer blockchains like Solana have different consensus algorithms that allow for a 'global clock' to be created with minimal bottlenecks. It wouldn't be as fast as everything sitting on a server but its performance would be adequate for traders, IMO. Bonus section: dark pools could be created with SGX or MPC protocols. There are some popular decentralized exchanges at the moment. But IMO they will need more features that traders are familiar with to be competitive (there's more than just currency pairs and limit orders tbh.) Also: big shout out to https://www.projectserum.com/ https://www.projectserum.com/
- gjulianm 5y agoI guess most people use exchanges for the possibility to interface with non-crypto currencies, right? I don't think you can set up a dollars-Bitcoin exchange without centralized exchanges.
- Uptrenda 5y agoWell, everyone has their own bank account. There's a lot of potential there to just transact directly. You would have to design the deposit layer to be someone efficient though so traders can still use credit. But I think its possible. To give you an example there is this application called https://bisq.network/ https://bisq.network/ that uses double-sided collateral in contracts to trade fiat currencies. There might be the potential to link this up with SSL, too. I've seen this application that can provide proofs that a page was in your browser https://tlsnotary.org/ https://tlsnotary.org/. Use that to prove a bank transfer happened on an SSL page and you've got yourself a dex that can work trustless with oracles.
- garbagecoder 5y agoYou should put your savings in crypto. Lol.
- tudorw 5y agoonly $150? netflix and chill
- erik_landerholm 5y agoIt’s amazing to me anyone uses crypto. If banks or exchanges were this bad at holding on to your money, no one would use them…ever.
- whiskyant 5y agoThis is a random small exchange that I've never heard of. I don't think a popular exchange hasn't been hacked for years now.
- afroboy 5y agoPeople who trade crypto they don't see it as an alternative to banks or real money they just use it as gambling platform with really good odds than casino.
- okareaman 5y ago"People complain about the weather but nobody does anything about it" ~ anon "It rained in Seattle today and in other news a crypto exchange was compromised for hundreds of millions of dollars" It's weird how this keeps happening and a lot of people shrug their shoulders and move on. I don't buy that we're still in the wild west phase of crypto. We've had enough time to figure this out. If I was conspiratorial minded I'd think it was an intentional weakness built into the system.
- myaccoun90 5y agoOr... people were selling like mad due to the 20% crypto drop and the exchange didn't actually have the tokens so they just closed shop and called it a hack. Is there any proof they continuously held those funds until the hack?
- bob332 5y agoCrypto is for mugs
- Animats 5y agoAs usual, the trouble with cryptocurrency exchanges is that they mix multiple functions. * They're an exchange, matching orders. * They're a retail broker, taking orders from customers and holding funds. * They're a custody institution, holding both fiat and cryptocurrencies. * They're banks, lending to others and receiving interest, and borrowing from customers and receiving interest. * They're traders themselves, for their own account. Now, in the real world, all of those functions used to be done by separate companies. With "deregulation", there are banks which have brokerage, custody, and trading units, and they do get into trouble. Which is why those are all highly regulated industries with a lot of inspection, required disclosure, and insurance backup. You'd think the "decentralized finance" people would have figured out a way to separate those functions by now. But no.
- 1270018080 5y agoDecentralized finance is a pipe dream. If it were truly decentralized we would have individuals managing all of the responsibilities you listed. Fraud would be EVEN MORE common. I forgot where I read this, but someone said something like "Crypto advocates are learning in real time why finance/banks are centralized. They're playing out the history of finance reform at hyperspeed."
- xwolfi 5y agoSoon they ll innovate by having government backed physical "coin" they ll call coin notes :D
- tcgv 5y agoIn fairness, BitMart is not "decentralized finance", it's a privately owned business that allows it's customers to trade crypto.
- disruptalot 5y ago> You'd think the "decentralized finance" people would have figured out a way to separate those functions by now. But no. But yes. I'm not sure how you've heard the term "decentralised finance" but haven't heard of decentralised exchanges, both traditional Ethereum DEXs and more novel cross chain ones. They successfully separate out: - User funds by self custody - protocol rules that are publicly verifiable. - build/bring your own front end - market making- AMM, order relayers + others - lending and borrowing including the above stack in completely separate but composable protocols
- SavantIdiot 5y agoSo does this mean if this happened to an FDIC-insured cryptoexchange like Gemini everyone gets their investments/monies back?
- amw-zero 5y agoI thought crypto was supposed to be more secure