BitMart Hack Puts Crypto’s Weakness on Display

Well, crypto got hacked again. This time it was the exchange BitMart, which announced a hack of at least $150 million on the evening of Saturday, Dec. 4.

Blockchain security firm Peckshield — which spotted and tweeted out a warning of the leak about an hour and a half before BitMart CEO Sheldon Xia announced it — put the losses at closer to $200 million.

Read more: Crypto Exchange Bitmart Confirms $196M Lost in Security Breach

Saying that the stolen funds were “a small percentage of assets on BitMart,” Xia added that customers will not suffer any losses, promising “BitMart will use our own funding to cover the incident and compensate affected users.”

The theft comes less than a week after decentralized finance (DeFi) project BadgerDAO was hit for $120 million by a hacker who drained funds directly from users’ wallets. Which comes just four months after the mid-August attack in which a hacker drained a staggering $612 million from another DeFi project, Poly Network (and, strangely enough, promptly gave it all back).

DeFi is an especially inviting target, and the lack of central control means there’s less pushback against crooks. DeFi projects have been hit to the tune of $10 billion so far, according to a recnet report from crypto intelligence firm Elliptic.

Also read: DeFi Losses Top $10B From Exploits, Fraud, Theft

Then there were the 6,000 Coinbase users whose wallets were drained in a phishing attack in October.

So, what’s going on? Well, business as usual.

A Juicy Target

There’s a couple of reasons for all these hacks, starting with how large they are. When you’ve got the largest vault around, you’ll attract all the top criminals. Especially when, like crypto, your vault isn’t too secure.

Remember, one of the early ways bitcoin broke into mainstream consciousness was when a hacker drained $350 million in bitcoin from the Mt. Gox exchange in a February 2014 hack.

Part of the problem is that exchanges need “hot” wallets that are connected online for their ongoing transactions, which can run to billions of…