Market Meditations | November 2, 2022

How do you even pronounce Deribit? I lean towards a frog noise, but it could just as easily be Deri-bit or a French-sounding Deri-bee. Oh, and they’ve been hacked.

  • Deribit is a Dutch-based crypto options and futures exchange.
  • They launched in 2016 and are in the top 10 derivatives exchanges with ~$300 million in daily volume.
  • However, as an unregulated entity, they aren’t available to U.S. users.
  • Earlier this year they were considered a disputed asset in the 3AC bankruptcy claims and hinted at having to write off some debts from others.
  • And to compound matters, Deribit tweeted this morning that their hot wallet had been compromised.
  • They claimed the hack is isolated and they are currently tracking the $28 million in stolen funds.
  • As a temporary measure wallets were frozen and users are requested not to submit deposits at this time.
  • Reassuringly, Deribit announced that their insurance fund would not be impacted. The loss of funds will be covered by the company reserves.
  • Deribit claims to “keep 99% of …user funds in cold storage to limit the impact of these type of events“.
  • Despite this, they become the latest in a long list of fourth-quarter hacks.

P.S. My frog intuition may have been correct. A quick Google tells me it stands for Derivatives Bitcoin. Case solved.