After weeks of indecision, Bitcoin finally broke away from the $50,000 range. Unfortunately for those expecting a good start to December, Bitcoin and the broader digital asset market fell into a tailspin on Friday night. Here are some notable events of the past few days that may have played a role in this activity.
Exchange hacks are not new to crypto. Over the years, dozens of thieves have gotten away with literally billions of dollars. The past week has shown that while digital assets have managed to make great strides over the years, security measures simply haven’t kept pace. Cumulatively, subsequent hacks have resulted in over $350,000,000 being stolen in just a few days.
Nearly $200,000,000 was stolen over the weekend as hackers were able to take advantage of what is described as a “hot wallet compromise”.
In this event, a mix of tokens from over 20 different chains were stolen. PeckShield – the company that first discovered the theft – describe the method like “Pretty simple: transfer, exchange and wash”.
While BitMart is unlikely to be able to recover the majority of the funds it lost, the affected customers will thankfully not be responsible for the theft. BitMart CEO Sheldon Xia clarified this, indicating, “BitMart will use its own funding to cover the incident and compensate affected users. We are also talking with multiple project teams to confirm the most reasonable solutions such as token swaps. No user assets will be harmed.
A few days before BitMart learned of the events described above, the decentralized platform MonoX suffered its own hack totaling over $30,000,000.
In this case, hackers were able to steal funds by taking advantage of an exploit in the MONO smart contract, allowing to manipulate/inflate token pricing. Once inflated, these tokens were then used to buy more at a regular price.
If two hacks in a week wasn’t bad enough, BadgerDAO lost $120,000,000 on its own. As it stands, BadgerDAO says it has engaged Chainalysis to investigate and determine the cause of this theft.
In an effort to appeal to the good nature of thieves, BadgerDAO has issued the following advisory.
“To the actor – You have taken funds that do not belong to you but we are willing to work with you and compensate you for identifying this vulnerability in the systems.
We provide you with a direct line of communication to discuss a peaceful resolution without involving outside parties. Contact us to discuss further and do the right thing on behalf of the community.
Although it may seem like a stretch, such an event happened earlier this year when $600,000,000 in stolen funds were income by a hacker after the affected exchange at the time issued a similar plea.
Notably, this hack affected not only average investors, but also large corporations. Lending giant Celsius, in particular, lost more than $50,000,000.
Market reaction and measures
While things weren’t too rosy at the start of the weekend, few expected the crash that ensued. Within an hour, Bitcoin price managed to lose over $7,000, briefly touching the $45,000 mark.
With this recent activity, many traders have started to protest/fear about the direction the market is heading. As such, the popular “fear and greed index” went from greed to extreme fear within weeks.
Despite this sharp decline and change in sentiment, most analysts agreed that Bitcoin still remains in a bull market – albeit dangerously close to entering bearish territory. Until figuring out which direction the market will go from here? Nobody really knows.