As they are connected to the internet, “hot wallets” offer easy access to the stored digital currency but there’s also the potential risk of being targeted by hackers.
Peckshield estimated that hackers were able to steal around $100 million in crypto from its hot wallet on the Ethereum blockchain and $96 million from its Binance smartchain hot wallet. There are more than 20 different tokens which include shiba inu, safemoon, and binance coin.
“In response to this incident, BitMart has completed initial security checks and identified affected assets,” the company said on Monday. “This security breach was mainly caused by a stolen private key that had two of our hot wallets compromised.
By Geoffrey Smith
Investing.com — The crypto winter hasn’t – yet – stopped the flow of institutional money into the digital currency space.
Crypto platform FalconX, which specializes in offering digital asset-themed services to institutional investors, said on Wednesday it had attracted $150 million in fresh capital, through a Series D fundraising led by Singapore’s sovereign wealth fund GIC and B Capital at a valuation of $8 billion.
Hedge funds Tiger Global, Thoma Bravo, Wellington Management, and Adams Street Partners also participated.
The valuation is more than double what FalconX achieved in its last funding round 10 months ago, when it raised $210 million at a valuation of $3.75 billion. As such, it stands out starkly from a trend of falling cryptocurrencies and collapsing lender networks that have dominated news in the space for the last few weeks.
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Nomad team confirmed that it was aware of the “incident involving the Nomad token bridge” adding it is “currently investigating the incident.”
Various amounts of WBTC, wrapped ethereurm (WETH), USD coin (USDC), frax (FRAX), covalent query token (CQT), hummingbird governance token (HBOT), IAGON (IAG), dai (DAI), gerowallet (GERO), card starter (CARDS), saddle DAO (SDL), and charli3 (C3) tokens have been taken from the bridge, according to data compiled by crypto security firm PeckShield.
According to Sam Sun, Head of Security at Paradigm, the hack was possible because “the Nomad team initialized the trusted root to be 0x00” during an upgrade, which had the “side effect of auto-proving every message.”
“This is why the hack was so chaotic – you didn’t need to know about Solidity or Merkle Trees or anything like that,” Sun added.
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Web3 industry. The fund will invest USD 150m in “early-stage retail and institutional projects” that are “synergetic” to Nexo’s core business, an announcement from the company said.
The new investment fund, dubbed Nexo Ventures, will for now focus on five areas of investment, according to the firm:
- decentralized finance (DeFi) innovation
- metaverse, non-fungible tokens (NFTs), and GameFi (gaming + DeFi)
- payments and trading infrastructure
- compliance solutions.
The fund will be led by Nexo’s Head of Corporate Finance and Investments, Tatiana Metodieva.
Commenting on the launch of the new venture fund, Metodieva argued that the fund differs from most traditional investment funds.
“We’re native to and have a deep understanding of the digital asset industry and technology.
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There’s another concern with centralized exchanges: hacking. With a CEX, the exchange holds the crypto traded on its platform—at least in the short term, while trades go through—raising the risk of hackers stealing assets.
To address this risk, centralized crypto exchanges have beefed up security over recent years.
Among other strategies, they now store most customer assets offline and take out insurance policies to cover crypto losses in the case of hacking.
If you like the convenience of a centralized exchange, you can reduce your risk by transferring crypto to a separate, off-exchange hot or cold wallet.
Decentralized crypto exchanges (DEX) distribute responsibility for facilitating and verifying crypto trades. Anyone willing to join a DEX network can certify transactions, much like the way cryptocurrency blockchains work.
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Investors GIC and B Capital co-led the Series D funding round, which brings the total raised by the company to more than $430 million. Thoma Bravo, Wellington Management, Adams Street Partners and Tiger Global Management also participated in the round.
The company provides what are called prime brokerage services to institutional partners allowing them to access and manage their crypto assets with services that simplify trading, credit and clearing across multiple markets at once with seamless execution.
Recent market downturns and volatility for crypto assets have seen bitcoin, the largest cryptocurrency by market cap, fall to its lowest value since November 2020 during June amid increasing volatility.
Other cryptocurrencies such as Ether, the second-largest cryptocurrency, tumbled as much as 19%, to $881, before recovering 11% earlier in the week.
However, Chief Executive Raghu Yarlagadda isn’t concerned about this volatility affecting the bottom line for FalconX because the objective of the platform is to support customers in providing for their trade strategies amid any given market conditions.
“FalconX is one of the very few crypto prime brokerages that do not take on market risk, so we’re not in conflict with our clients and their trading strategies,” said Yarlagadda. “In light of recent market conditions, this is extremely valuable to our clients who demand a reliable market infrastructure provider.”
Yarlagadda added that the industry is still in the early stages of transformation and thus is still in its first stages of use cases in the markets.
Hackers were able to withdraw assets of the value of approximately 150 million USD.”
While the crypto platform said that around $150 million in crypto assets were stolen during the hack, a blockchain security and data analytics firm came up with a different estimate, CNBC reported. Peckshield, which first published the hack, estimated the value of the stolen assets closer to $200 million.
The publication contacted the exchange to clarify the discrepancy but the company declined to comment.
The exchange assured that the affected hot wallets contained only a small percentage of its assets. Crypto can be stored in a “hot,” “cold,” or a combination of both.
It suggests sustained institutional interest in an asset class despite the difficult short-term outlook for crypto adoption due to the rising trend in global interest rates.
FalconX said in a statement the fundraising came after its best ever quarter for signing up new customers “despite the volatile public and private markets.”
“This growth is driven by demand from a diverse range of institutional market customers who are looking for a reliable execution platform in volatile crypto markets, capital efficiency to scale returns, and strong risk management,” it said.
FalconX, which recently became the first crypto-focused broker to register with the U.S. Commodity Futures Trading Commission, styles itself as a prime brokerage for institutional accounts which doesn’t itself take on market risk.
We prioritize strategic investments and aim to integrate innovative solutions into Nexo’s product ecosystem and across our global market footprint,” Metodieva said.
Before launching Nexo Ventures, Nexo had already made investments in a number of crypto ecosystems. These include 1inch, BCB Group, BlockFills, Bware Labs, Interlay, Mizar, Qredo, Rain, Texture Capital, The TIE, and Yield Protocol.
Nexo is a company led by Antoni Trenchev, a former member of parliament in Bulgaria.
Broadly speaking, there are two categories of crypto exchanges: centralized exchanges and decentralized exchanges. Each category comes with its own advantages and disadvantages.
Centralized crypto exchanges (CEX) are managed by one organization.
Centralized exchanges make it easy to get started with cryptocurrency trading by allowing users to convert their fiat currency, like dollars, directly into crypto. The vast majority of crypto trading take place on centralized exchanges.
Some crypto enthusiasts object to centralized exchanges because they go against the decentralized ethos of cryptocurrency.
Even worse in the eyes of some crypto users, the company or organization may require users to follow Know Your Customer (KYC) rules.
All you had to do was find a transaction that worked, find/replace the other person’s address with yours, and then re-broadcast it.”
Anonymous Terra researcher FatMan called the incident “the first decentralized robbery.” They added that “all one had to do was copy the first hacker’s transaction and change the address, then hit send through Etherscan.”
Cryptonews.com has reached out to Nomad for comment.
The Nomad team has not yet provided any further details about the hack. In their latest tweet, they warned about impersonators trying to collect funds.
“We’re aware of impersonators posing as Nomad and providing fraudulent addresses to collect funds,” the team said.
“We aren’t yet providing instructions to return bridge funds.