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Cyberattack on Crypto exchange Bitmart: $196 million taken

Hackers stole $196 million from the Crypto trading platform Bitmart on Saturday.

Bitmart confirmed the hacking in an official announcement later on Saturday night. The company called this a large-scale security breach and wrote that hackers extracted approximately $150 million in assets.

Later, blockchain security and data analysis company Peckshield estimated the loss to be almost 200 million U.S. dollars.

Bitmart added in the announcement that they suspended all withdrawals until further notice. According to them, the company is going through a security review.

Peckshield estimates that Bitmart lost about 100 million U.S. dollars of various cryptocurrencies on the Ethereum blockchain and 96 million on Binance Smart Chain. The hackers mixed over 20 tokens, including Binance Coin, safemoon, and Shiba Inu.

Bitmart exchange provides spot trading, leveraged futures trading, lending, and mortgage services. It is usually one of the centralized crypto exchanges with the largest trading volume.

After transferring funds from Bitmart, the hacker used a decentralized transaction aggregator called “1inch” to exchange the stolen tokens for ether.

From there, the ether is deposited into a privacy mixer called Tornado Cash. Tornado Cash makes the assets more difficult to track.

So, even though the blockchain is public, there are still ways to make it difficult for investigators to track the final destination of the transaction.

This latest vulnerability occurred in the newest wave of hacking attacks.

Last week, the cryptocurrency lender Celsius Network admitted to losing funds due to a $120 million hack attack on the decentralized financial platform BadgerDAO.

In August, a hacker stole more than $600 million worth of tokens from the cryptocurrency platform Poly Network. Curiously, the attackers then refunded almost all of the money.

Crypto Regulators Might Deny Compensation to Traders After Their Exchange Goes Bankrupt

According to a UK Financial Conduct Authority proposal, cryptocurrency investors may be excluded from the UK’s compensation plan when a company goes bankrupt.

In a discussion paper on Monday, the regulator said that in some cases, particularly high-risk or alternative investments, such as digital assets and unlisted securities, may receive an exclusion from the financial services compensation plan.

The FCA does not authorize most companies to sell crypto investments. It means that traders will not receive compensation. Still, these proposals signify hard-line speech and new signs that crypto is largely beyond the control of global regulators.

If the company goes bankrupt, the FSCS can protect up to £85,000 (US$112,700) per customer. Several investment companies closed down. Therefore, the tax on the company more than doubled in ten years to 717 million pounds. The FCA is looking for ways to reduce costs.

Regulators are still considering whether high-net-worth individuals or sophisticated individuals should be eligible to claim compensation. Due to price fluctuations, product complexity, and lack of consumer protection, cryptocurrencies have attracted the attention of global regulators.

Bitcoin, the largest cryptocurrency, fell as much as 21% on Saturday and then rebounded. At the same time, the second-largest cryptocurrency, Ethereum, fell by 17% on the same day. In August, the US Securities and Exchange Commission Chairman, Gary Gensler, warned that the cryptocurrency market is full of fraud, scams, and abuses. If the US government does not strengthen the protection of investors, it might harm many people.

FCA stated in November last year that investors should be ready to lose all their money. FCA’s latest recommendations are far from complete. On Monday, the regulator said that any change that excludes encryption could increase confusion about which activities and products have protection. The deadline for responses is March 4. 

Bitcoin’s Alarming Drop On Weekend: How Are The Cryptos Performing Recently?

 

Bitcoin plummeted by nearly 5% by Monday. After a miserable weekend, there was little respite from the world’s largest cryptocurrency at the beginning of this week, losing more than one-fifth of its value.

The rout pushed the price of Bitcoin and the amount of investment in Bitcoin futures back to the level of early October, after which the price soared, bringing the token to the peak of $69,000 on November 10. It finally fell 3.9% to US$47,567.

Traders said that the weekend’s decline is related to the traditional market’s wide-ranging away from higher-risk assets due to concerns about the Omicron variant of the coronavirus, coupled with lower trading liquidity, which tends to plague cryptocurrencies on weekends.

The open interest of all exchanges was last at $16.5 billion, while it was $23.5 billion on Thursday and 27 billion on November 10.

Last weekend, as the price dropped, investors who bought bitcoin on margin saw the exchange close their positions. This led to a series of sell-offs. On Saturday, many retail-focused exchanges closed more than $2 billion in long Bitcoin positions.

Some exchanges let traders bet 20 times or more of their investment size. This means that small moves in the wrong direction may cause the exchange to liquidate the client’s position after its initial investment is exhausted.

Ethereum, the world’s second-largest cryptocurrency, also took a hit on Saturday, although not so severely. However, it fell 5.5% on Monday to US$3,965, and its November 10 high was US$4,868, but its larger rivals have risen.

On Sunday, one ether reached 0.086 Bitcoin, the highest level since May 2018.

 

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