It was reported that two Bitmart hot wallets were hacked earlier today. one of the hot wallets is a BSC wallet, while the other is an ETH wallet. How the attack was carried out has not been deciphered yet but the crypto exchange has estimated the amount of loss to the attack at around $150 million.

In the report, it was stated that other hot wallets on Bitmart are intact. On the part of the crypto exchange, an immediate security review is underway, and currently, it has suspended withdrawals from the exchange until further notice.

The exchange had earlier reported on its official telegram channel that the withdrawals from those wallets are nothing to be bothered about. But the CEO took to Twitter to admit the attack. After the incident, the native token of the exchange recorded a 9.7% fall in 24 hours and is currently trading at $0.323248.

Peckshield Believes the Losses Were Understated

Peckshield Inc., a blockchain security company in its review estimated the total losses from the attack to be around $196 million. The report stated that $100 million were stolen from the ETH wallet and $96 Million from the BSC wallet. Tokens under the BSC – Binance Smart Chain wallets are BNB, BUSD, EnergyX, X2P, SAFEMOON, BabyDoge, STACK, MOONSHOT, ZOE, HERO, FLOKI, FLNS, STARSHIP, JULb GMEX, CMCX, BETU, GMR, and SPE.

After the private investigation from Peckshield on the attack, the security firm concludes that the hacker has already withdrawn the funds, and he used the 1inch DEX aggregator to swap them for ETH. After which he routed the funds through a privacy mixing protocol for the ETH network called Tornado Cash which breaks the on-chain link between the destination and the source addresses via smart contracts that act as a pool for ETH deposits to one address and allow withdrawal to another.

This privacy mixer will pool funds from multiple users before funding the destination addresses. Once this is done, it is relatively impossible to know where the funds went or how much was involved in the transaction.

Bitmart to Receives Help from Huobi

One of the ways out for Bitmart is to collaborate with other crypto exchanges to flag every hot wallet that receives huge deposits from the Tornado Cash protocol. With this understanding, Huobi took to Twitter to announce that they will be willing to help Bitmart identify any transactions that involved huge deposits.

The Tornado Cash platform was developed by the ZCash – an open-source research team. The protocol is also used as an anonymizer in the attack on the MonoX Finance protocol earlier this week.