Binance hack results in 7000 BTC loss. Binance, the Malta-registered Bitcoin and Crypto asset exchange, one of the most well-respected in the market, revealed that it was the victim of a “large scale security breach”.
— Binance (@binance) May 7, 2019
Yesterday, Changpeng “CZ” Zhao, the chief executive of Binance, went on Twitter to reveal that Binance had to undergo “unscheduled server maintenance” and that the maintenance would affect deposits and withdrawals. CZ noted that funds “are #safu” in an attempt assuage users that nothing was amiss. #Safu has come to be a hashtag to rally around the security of funds during times of duress – and it was noted that CZ used the hashtag in his tweet.
Have to perform some unscheduled server maintenance that will impact deposits and withdrawals for a couple hours. No need to FUD. Funds are #safu.
— CZ Binance (@cz_binance) May 7, 2019
However, as the story developed, and as we learned more from Binance, we found out that not all funds were entirely #Safu. Unnamed hackers were able to obtain a large number of user API keys, 2 factor authentication codes, and other tidbits of information that allowed the attackers to gain access to users’ accounts on the platform.
“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.”
Binance reports that the group/entity used a series of techniques to get their hands on the information, including phishing, viruses, potentially SIM swapping, and other modes of attack. With this, hackers were able to withdraw 7000 BTC from Binance’s hot wallet.
The company quickly noted that 7000 BTC was not a concern for them – only 2% of their holdings. The 42 million will be reimbursed by Binance’s SAFU fund – this will ensure that no user funds will be affected. Right now, Binance’s top priority is to conduct a thorough security review, and has since suspended deposits and withdrawals.
News of Binance’s hack has cryptocurrencies dipping ever so slightly. Bitcoin fell 1% on Bitfinex. Altcoins have faced a slump as well. Considering the hack was not due to Binance’s negligence, investors may soon realize that this snafu of 42 million dollars of Bitcoin isn’t earth-shattering for the cryptocurrency market.
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