The Brazilian cryptocurrency broker will absorb a $40 million loss from the incident, the report said. No customer losses are expected.
The attack targeted “hot wallets” but was quickly contained, according to the report. Mercado Bitcoin is investigating the incident, following the assets and working with authorities and relevant partners. No customer data was leaked, although the company temporarily suspended access to its app as a precaution.
This breach came days after Binance, the world’s largest crypto exchange, was the victim of a crypto heist in which hackers stole a record $6.3 billion. Net customer withdrawals were approaching $5 billion as of Monday morning, the report said.
Binance said it intends to cover the losses in full, PYMNTS reported Friday (Oct. 30).
“That commitment places the immediate financial burden on the exchange rather than making customers wait for investigators to recover the proceeds,” PYMNTS reported separately Friday.
Sandeep Pyapali, founder and CEO of stablecoin infrastructure company Mesta, outlined for PYMNTS the conditions for making good on that promise.
“User balances are only truly safe if the exchange replaces the missing assets quickly, reopens withdrawals in an orderly way and proves its reserves again,” Pyapali said.
Recovery takes different routes depending on the theft. Tether and Circle froze about $3 billion after the Binance hack. Issuer-controlled stablecoins have an avenue for intervention after funds depart an exchange.
Bitcoin has no issuer with equivalent powers, Eric Jardine, head of research at Chainalysis, told PYMNTS in the report. Authorities typically need the private keys or help from an exchange or another custodian holding the funds.
Stablecoin issuers, by comparison, could immobilize stolen funds before an attacker moves or converts them, then help recovery via the applicable legal process, though this does not guarantee restitution.
Meanwhile, Commodity Futures Trading Commission Chairman Michael Selig is using the Binance incident to make his case for bringing offshore cryptocurrency exchanges under federal supervision.
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