Bitmart

Last updated
BitMart
Company typePrivate
Founded2017
HeadquartersCayman Islands
Area served
Worldwide
ProductsTrading and Investment Management Platform
ServicesDigital Asset Trading, Peer-To-Peer Marketplace
Website bitmart.com

BitMart is a global, centralized cryptocurrency exchange operated by bachi.tech in the Cayman Islands. It is known for a 2021 security breach in which two-thirds of its assets were stolen. It was the subject of the Federal Trade Commission's first cryptocurrency probe in 2022.

Contents

History

BitMart was founded in 2017 [1] by Sheldon Xia. [2] It is operated by bachi.tech, [3] and based in the Cayman Islands. [4] The exchange was part of a major money laundering scheme prosecuted by the United States Department of Justice in 2024. [5]

Security breach

In December 2021, BitMart experienced a security breach. Approximately US$ 196,000,000 worth of cryptocurrency was stolen in the attack, [6] [7] which it claimed was a small percentage of its total assets. [8] During the investigation, BitMart halted withdrawals from all customers, [9] but did not stop trading of affected tokens. [10] Hackers used a compromised private key to break the encryption on two hot wallets associated the exchange. [11] [9] Their security firm said the hackers used the decentralized exchange aggregator 1inch [12] to swap the stolen tokens for ethereum, then deposited the ether into the privacy mixer Tornado Cash to obscure their identities. [13] : 120  Following the incident, BitMart pledged to reimburse all affected users, [6] claiming that only the two compromised wallets were impacted and customer funds were "safe and unharmed." [14] After five weeks passed, users reported that their funds had not been returned. CNBC participated in a live Twitter Spaces with 700 users about the incident, many of them facing financial ruin. The outlet reached out to Xia for an update, but said that the email bounced back. Users voiced concerns that during the same month the exchange closed Series B round for US$ 13,700,000 with a valuation of US$ 300,000,000, indicating that the exchange did not have the liquid capital to fund withdrawals. [10] The Los Angeles Times reported that the deposits were covered by insurance. [15]

In 2022, the Federal Trade Commission (FTC) opened an investigation into BitMart over the loss of customer funds. It was the first cryptocurrency case opened by the agency. [3] The case was dismissed in 2023. [16]

References

  1. ↑ Nagarajan, Shalini (2022-08-11). "FTC Probe Into $200M BitMart Hack Continues, Doc Block Denied". Blockworks. Retrieved 2026-01-05.
  2. ↑ Sigalos, MacKenzie (2021-12-06). "Hackers take $196 million from crypto exchange Bitmart, security firm says". NBC News. Retrieved 2026-01-05.
  3. 1 2 Nylen, Leah (August 10, 2022). "FTC Probes BitMart Exchange Breach, Marking Agency's First Crypto Case". Bloomberg.
  4. ↑ Roth, Emma (2022-01-09). "Victims of $200 million hack of BitMart crypto exchange still waiting to get their money back". The Verge. Retrieved 2025-02-05.
  5. ↑ "Eighteen Individuals and Entities Charged in International Operation Targeting Widespread Fraud and Manipulation in the Cryptocurrency Markets". www.justice.gov. October 9, 2024. Retrieved 2026-01-05.
  6. 1 2 Sigalos, MacKenzie (2021-12-05). "BitMart says it will compensate victims of $196 million hack and restore trading by Tuesday". CNBC. Retrieved 2026-01-04.
  7. ↑ Skiba, Richard (2024-07-26). Cryptocurrency: A Guide to Navigating the World of Digital Assets. After Midnight Publishing. ISBN   978-1-7636112-9-0.
  8. ↑ Charoenwong, Ben; Bernardi, Mario (2021). "A Decade of Cryptocurrency 'Hacks': 2011 – 2021". SSRN Electronic Journal. doi:10.2139/ssrn.3944435. ISSN   1556-5068.
  9. 1 2 Vigna, Paul (2021-12-07). "Why Companies Shouldn't Shame Employees Who Fall for Hacking Scams". Wall Street Journal. ISSN   0099-9660 . Retrieved 2026-01-05.
  10. 1 2 Sigalos, MacKenzie (2022-01-07). "Iranian immigrant lost $53,000 in crypto hack, says he faces ruin if BitMart doesn't pay him back". CNBC. Retrieved 2025-02-05.
  11. ↑ Gracy, M.; Jeyavadhanam, B.Rebecca; Babu, P. Krithik; Karthick, S. Hari; Chandru, R. (2023). "Growing Threats Of Cyber Security: Protecting Yourself In A Digital World". 2023 International Conference on Networking and Communications. IEEE: 1–5. doi:10.1109/ICNWC57852.2023.10127398. ISBN   979-8-3503-3600-9.
  12. ↑ Gkritsi, Eliza (December 6, 2021). "BitMart CEO Says Stolen Private Key Behind $196M Hack". www.coindesk.com. Retrieved 2026-01-05.
  13. ↑ Scharfman, Jason (2023). The Cryptocurrency and Digital Asset Fraud Casebook. Cham: Springer International Publishing. doi:10.1007/978-3-031-23679-2. ISBN   978-3-031-23678-5.
  14. ↑ Yang, Yuegi (December 6, 2021). "Crypto Exchange BitMart Vows Compensation for $150 Million Hack". Bloomberg.
  15. ↑ Healey, Jon (2021-12-24). "A beginner's guide to cryptocurrency". Los Angeles Times. Retrieved 2026-01-05.
  16. ↑ "SEMIANNUAL FEDERAL COURT LITIGATION STATUS REPORT" (PDF). FTC. December 31, 2023.
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