Monday, October 2, 2023
HomeCryptoBitMart still owes victims of $200 million hack

BitMart still owes victims of $200 million hack

Sarayut Thaneerat | Moments | Getty Images

Victims of the $ 200 million BitMart hack say five weeks have passed since the crypto exchange vowed to return their money, but many haven’t seen the dime yet.

“I’m not a big talker or a moan,” said Paul Delong, Austin’s business owner. “BitMart said that from a communication standpoint, they intend to provide us with more updates. We haven’t received any updates at all.”

DeLong says he has contacted the exchange many times, each time receiving a canned response from the bot informing him that BitMart and his lawyer are “working on it.”

In early December, BitMart wrote: In an official statement The exchange will spend its own money to redeem the victims of a major security breach accusing the stolen private key.

However, users are restless waiting for BitMart to fulfill its promise.

CNBC has spoken to several BitMart users targeted by the attack. Some of them face complete financial ruin if the funds are not recovered.

“It doesn’t matter if it’s $ 20, $ 500, or $ 10,000. Just contact us and let us know,” DeLong said.

Many of the victims have lost a specific token called Safe Moon. This is a cryptocurrency token built on the Binance SmartChain blockchain. Coins increased significantly in the second quarter of 2021 after a lot of celebrity support from rapper Lil Yachty and YouTuber Jake Paul.

CNBC asked if BitMart would fulfill its promise to repay the victims. BitMart CEO Sheldon Xia email address. His unconfirmed Twitter profile, CNBC bounced back, just as it did when it first contacted Xia in early December.

A spokeswoman said, “We support the withdrawal of all users, and we are discussing with multiple project teams to see the most reasonable solution, such as token swaps. Future updates will be on the official web site. It will be announced on the site. “The company did not answer more detailed questions.

Victims appeal for transparency

CNBC has spoken to more than 12 BitMart users who have been personally affected by this breach. One of the common themes of many of these conversations was the desire for transparency. The common sentiment was that bad news was better than no news.

A BitMart user who felt the token was “hostaged” sent a screenshot to CNBC of an interaction with an administrator running a BitMart Telegram account. When asked if he had more guidance on when to receive Safe Moon tokens on Thursday night, he replied, “I’ll announce when there’s an update.”

Toronto-based Mohammad said he had CNBC call his name, but his experience at Bitmart made him feel close to suicide.

Iranian refugees have $ 53,000 worth of Safe Moon tokens in their Bitmart wallet, of which $ 40,000 comes from loans that have to be repaid at 4% interest.

The 38-year-old CNBC says he works 24/7 as a tow truck driver for a roadside assistance company, from 7 am to 10 pm. He says he has to work long hours because the employer pays him a per-work fee instead of an hourly wage. He receives $ 20 for each job, but he has to pay for his diesel fuel.

He began investing in cryptocurrencies to open up his future in Canada.

“I thought I could make more money, then I could go to school and go to college to learn English,” Mohammad shared with CNBC. “I have no savings.”

Another BitMart user tells CNBC that it’s not just his money. His mother and mother-in-law pooled $ 30,000 together and asked him to invest cash in BitMart on their behalf.

“I was hooked because there was a weird hack after I put it in and I had nothing to give them,” he said.

New York-based “Mr. Blik” also asked not to use his real name, but told CNBC that the timing didn’t go wrong.

“This happened near the holidays … People sometimes have to liquidate some of their positions to pay for things to buy for kids for Christmas. . I was taken away from us. “

One Kansas-based crypto investor told CNBC that he wasn’t too worried until recently that about $ 35,000 remained in BitMart.

“There was a general understanding that BitMart only waited until the beginning of the year to repurchase hot wallet tokens stolen for tax reasons, and even had patience,” he said.

The same BitMart customer states that he is currently in contact with approximately 6,800 holders who are considering a class action proceeding against the exchange. They give it for about a week before taking action.

Beware of the Safe Moon Army

The company’s ambiguity helps to rejuvenate the so-called “Safe Moon Army.” This is a term given to the community of Safe Moon token holders.

BitMart hackers have succeeded in combining more than 45 coins, but Safe Moon tokens have been a significant part of the mess. Some BitMart users have reported refunds for tokens like Saitama, but Safe Moon owners are still volatile.

Safemoon investors using BitMart have also stated that they have not received “reflection” payments (such as dividends distributed to existing owners of tokens) since November. Therefore, BitMart’s Safe Moon investors feel double burned.

Even Safe Moon owners who have never used BitMart feel indirectly burned by the breach.

A U.S. Air Force veteran pointed out that when hackers stole Safe Moon coins and sold them on the open market, the price of the entire project went down. “We are all influenced by this,” he said.

Safemoon Army is putting pressure on BitMart through a Twitter campaign designed to embarrass exchanges to follow through repayments to hacking victims. The Safe Moon delegation is pushing the Twitter hashtag #WenBitMart, which started to catch on Monday night.

BitMart told CNBC to support token exchange, but victims say it could cost them money.

If one wants to liquidate BitMart tokens to USDT (a popular stablecoin fixed to the value of the US dollar), so at one-third of the market position where his safe moon tokens are traded today. I said I would. He will also face a 10% commission to trade due to Safe Moon’s trading requirements. (This 10% transaction tax acts as an incentive for users to keep their tokens and helps lower their prices. It also funds dividends paid by token makers to owners as an additional incentive. Will be provided.)

Even if BitMart makes a profit and repays everyone, it’s unclear if the exchange will buy back the equivalent assets lost at its current price. Current prices can be significantly higher in some cases...

The global head of Safemoon’s products is himself a BitMart customer. Ryan Arriaga says that 15% of his safe moon stash is in BitMart. But he believes the exchange will do the right thing.

“It’s not like many of these people involved were anonymous four or five years ago … people are wise to the space, they understand it better, and they can read the contract better. You can, “said Arriaga.

“We’ve come a long way because I believe Bitmart will keep its promises and do the right thing … especially in the Safe Moon Army, for what we’re trying to achieve. There is tremendous support. You won’t die. It’s not just about adding fuel to the fire. “

Users dig deeper

While BitMart customers are waiting for an answer, some customers are digging deeper into the crypto exchange itself and competing for time. CNBC joined the Twitter Spaces chat on Wednesday night, with nearly 700 people discussing the situation.

BitMart Finished $ 13.7 Million Series B Financing Round At the end of 2021 At a valuation of $ 300 millionGives a pause to anyone wondering how the exchange is prepared for $ 200 million in self-funded repayments to its clients.

Others have asked why BitMart does not take out insurance to repay the stolen funds. CNBC submitted the question to BitMart and the exchange refused to answer.

CNBC also asked if the exchange is conducting an internal audit to assess whether fraud has occurred within its rank. BitMart also chose not to answer that question.

The December hack affected two of BitMart’s “hot wallets,” while the other assets were clearly “safe and intact.”

Cryptocurrencies can be stored as “hot”, “cold”, or a combination of the two. The hot wallet is connected to the internet and the owner has relatively easy access to his coins so he can access and use the crypto. The trade-off with convenience is the potential for exposure to malicious individuals.

The last obvious concern among many BitMart users is that instead of stopping the trading of affected unsecured tokens, BitMart just stopped withdrawals. CNBC watched a video of a person buying a Safe Moon token on an exchange on January 5, well after the hack.


- Advertisment -
Google search engine

Most Popular

Recent Comments