Monday, January 20, 2020

Binance Exchange Hacked, Loses $40 Million Worth of BTC

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Adedamola Bada
I'm Damola, a computer engineer from Obafemi Awolowo University. A crypto enthusiast, marketer, and writer who is seeking to achieve career excellence through hard work and positive contribution to the organization that aspires for excellence. Contact me on damolabada@gmail.com

Binance exchange, the biggest and most popular crypto exchange by trading volume suffered a major hack attack earlier in the week, as hackers made away with more than 40 million USD worth of Bitcoin.

7000 BTC Disappears after Attack

On Wednesday, Binance’s CEO Changpeng CZ Zhao promptly released a public announcement informing the public and Binance users of a recent breach in its security system that had just been discovered; which inadvertently led to 7000 bitcoins (BTC) disappearing from one of Binance’s hot wallet.

According to the announcement, the astonishing number of Bitcoins stolen was only managed in a single transaction before it was flagged by a several alarm system as and further withdrawal of funds was swiftly disabled. Binance announced via its official blog:

“We have discovered a large scale security breach today, May 7, 2019, at 17:15:24 (UTC). Hackers were able to obtain a large number of user API keys, 2FA codes, and potentially other info. The hackers used a variety of techniques, including phishing, viruses and other attacks. We are still concluding all possible methods used. There may also be additional affected accounts that have not been identified yet.”

According to the post, the attack had long been in orchestration as the attacker demonstrated enough patience to create multiple accounts and device methods that would evade Binance’s security checks. Once the attack was executed, the company shut down further operations as quickly as possible and are currently making security reviews to determine what other methods were employed by the hackers.

What This Means

Binance is one of the biggest exchanges in the world and is definitely the most popular. By its status, it has one of the best security experts in the world and has the most experienced of talents working to secure its systems. The recent hack only goes to show that there are no exchanges that are really safe. The more reason it is important for crypto holders to have a cold storage wallet instead. Rather than keeping their coins on exchanges, repeated successful hacks are just proving that the best of security might not keep the dark underworld at bay.

US-based exchange Coinbase had in certain times revealed it has dozens of ethical hackers and security experts working on the security of its exchange, however, users are still encouraged to keep their coins in cold wallets. There is perhaps never a hundred percent guarantee when it comes to crypto trade platforms, including those that allow buying bitcoins with credit/debit card without verification. Binance’s latest unfortunate attack, albeit relatively mild, just proves this.

Should Binance Users Be Worried?

The company has assured users involved in the hack there would be no need to worry, the losses are quite covered. Binance exchange is one of the profitable exchanges in the world and has most definitely considered mitigating factors to salvage any worst case scenario. While users would not be able to make any withdrawal for at least a week (as part of the security review process), all incurred costs will be covered by Binance’s Secure Asset Fund for Users (SAFU Fund).

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