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CEX BitMart Loses Almost $200 in Hack of Two Hot Wallets

CEX BitMart Loses Almost $200 Million in Hack of Two Hot Wallets

Posted Monday, December 6, 2021 by
Aiswarya Gopan • 1 min read

Centralized exchange BitMart suffered a large scale security breach over the weekend, with two hot wallets being drained of nearly $200 million. The hack was revealed by blockchain security company Peckshield, which was initially refuted by the CEX, following which BitMart’s CEO confirmed the incident via Twitter.

Around $100 million was lost from the ETH wallet while around $96 million was stolen from the Binance Smart Chain (BSC) wallet, across several assets, including SAFEMOON, X2P, FLNS, BabyDoge, HERO, STARSHIP, FLOKI, BNB, and more. The hacker drained the funds from the hot wallet and swapped them for Ethereum via DEX aggregator 1inch.

To further complicate the potential retrieval of the stolen funds, the swapped ETH was routed through Tornado Cash, a privacy mixing protocol that can break the on-chain link between source and destination addresses using smart contracts. The protocol mixes funds received from multiple sources in pools to make it difficult to identify the trail and exact quantity of transactions.

This is not the first time that Tornado Cash has been in the news for managing stolen funds. Just last week, hackers who stole funds from the MonoX Finance DeFi Protocol hack also used the open-source protocol to anonymize the stolen funds and make them hard to track.

One possible way to work around this is to keep an eye on large deposits made from Tornado Cash into other crypto exchanges. Huobi is one such exchange that has already committed to providing any assistance with tracing the funds and helping BitMart out.

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