Binance Lose 7000BTC to Hackers in First Major Security Breach

Wilfred Michael 

Wilfred Michael

News reporter

08 May 2019,
02:08
Binance Lose 7000BTC to Hackers in First Major Security Breach

Leading cryptocurrency exchange, Binance confirmed in an update that it has witnessed its first large scale security breach, with hackers able to withdraw 7000BTC ($40.4 million) in a single transaction. The confirmation followed a period of hours during which the exchange paused withdrawals citing "unscheduled server maintenance".

Details of Binance Hack Incident

  • Hackers got through the exchange by using methods such as phishing and viruses to collect a large number of user API keys, 2FA codes, and potentially other info.
  • With the stolen user information, they executed "well-orchestrated actions through multiple seemingly independent accounts" at a period Binance described as the most opportune time.
  • However, the size of the transaction triggered alarms for a security check, prompting Binance to pause all withdrawals from its platform.
  • It was already too late, as the exchange noted that by then , the hackers had moved 7000BTC from it's hot wallet.
  • Binance said all of it's other wallets are safe with affected user accounts now under control and investigation into other affected users still ongoing.
  • The stolen funds ($40.4 million) will be replaced from the exchange's SAFU Fund, which represents a self-insurance strategy fund where Binance reportedly keeps 10% of its daily trading fees.

Meanwhile, the Binance security breach is the third major hack incident on cryptocurrency exchanges this year. Stmarket.co reported a similar development at peer-to-peer exchange, LocalBitcoins with the other incident involving New-Zealand based, Cryptopia.