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One of the most secured & leading cryptocurrency exchange, Binance, has just been compromised reporting over 7,000 Bitcoin worth $40.5 million stolen by the hackers.
Binance is a highly trusted cryptocurrency exchange and there have been several hacking attempts earlier but none succeeded until this one. According to Binance, this time the hackers were somehow able to obtain a large number of user API keys, 2FA codes, and potentially other info. The sources of attacks were many, and Binance believes it included phishing & viruses.
As of now, there is only one affected transaction that affected Binance’s BTC hot wallet which only contained about 2% of their total BTC holdings. According to Binance, all of their other wallets are secure and unharmed.
Link to the affected transaction: https://www.blockchain.com/btc/tx/e8b406091959700dbffcff30a60b190133721e5c39e89bb5fe23c5a554ab05ea
The hackers had the patience to wait, and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time. The transaction is structured in a way that passed our existing security checks. It was unfortunate that we were not able to block this withdrawal before it was executed. Once executed, the withdrawal triggered various alarms in our system. We stopped all withdrawals immediately after that.
The exchange has been very open and transparent about the hack, and the CEO & Founder CZ also did a scheduled AMA after the hack. He talked about the hack and future plans in his Livestream:
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— @binance
In his Livestream he mentioned that they will recover the lost funds through the SAFU Fund. CZ and the exchange also mentioned this on their recent tweets and on the announcement channel respectively.
Binance Security Breach Update
The mainstream crypto community as well as the big names in the industry like Coinbase and other exchanges are also extending their support by pledging to block those addresses for deposits.
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Also thanks to @coinbase and many other exchanges (again, can't list everyone) pledging to block deposits from those addresses. Much appreciated! Also much appreciate the "unitedness" of our industry to fight hackers and fraud.
Justin Sun, CEO of Tron Foundation & BitTorrent pledged to deposit 40 Million USDT into Binance to extend support.
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To support @binance , I will personally deposit 7000 BTC worth USDT (40 million USDT) into @binance to buy $BNB, $BTC , $TRX & $BTT if @cz_binance agrees. No need to #FUD! Funds are #SAFU!
But the gentle CZ politely refused all the incoming offers for financial support and told the SAFU Fund is enough to help them cover the loss.
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Thanks for the support, really appreciate it. But currently no need. We will cover the loss from the #SAFU fund, there is enough. We are hurt, but not broke. We are working hard to resolve the issue, so that everyone can deposit and withdrawal again. Will take some time. https://t.co/0j4J0fk99W
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Also would like to say thanks to $QKC and a whole lot of other partners (sorry, can't list everything here) pledging support to us. We don't need the funds now. Our charity efforts will continue, please consider to donate to those, maybe after we pass this bump.
All of this clearly portrays that the funds are #safu and the entire crypto community is united. But it is strongly recommended that you use centralized cryptocurrency exchanges only for Trading & participating in IEOs. For hodling, always keep your assets on those wallets where you have access to your private key.
The users of Binance have to wait up to one week until the deposits & withdraws are open as the exchange is making sure to be more secure until they restart these operations. However, you can still trade on the exchange without any interruptions.
Rishabh Anand is a young entrepreneur and investor. Being both a growth & investments expert, he is catalysing & advising various projects worldwide. Follow Rishabh if you like his work: Instagram | Twitter
The Binance Hack is A Worrisome Development for Us All was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.
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The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.