The Strategist

Hackers steal over 7,000 BTC from Binance

05/09/2019 - 04:52

One of the largest cryptocurrency exchanges in the world, Binance, reported that hackers managed to withdraw more than 7,000 bitcoins from it in one day, and also to steal some of its users' data. The amount stolen by hackers exceeds $ 40 million.

The incident was reported on Binance’s blog by its CEO Zhao Zhangpeng. According to Mr. Zhao, the exchange has experienced a "large-scale hacker attack", and all the funds - more than 7 thousand bitcoins for an amount exceeding $ 40 million - were withdrawn in several stages and transferred to one wallet. “The hackers waited patiently and, as soon as an opportunity appeared, carried out well-worked actions through separate accounts,” the Binance head said in a statement.

The cryptocurrency exchange, according to Mr. Zhao, “could not block the withdrawal of funds”.

The hackers conducted the transaction in such a way that it did not arouse suspicion in the Binance protection system. The protection worked out only after the operation was completed.
The funds were withdrawn from the so-called hot wallet of the exchange, which is always connected to the Internet, in contrast to the cold wallet, which operates autonomously. Hot wallets hold about 2% of the bitcoin reserves held by cryptocurrency exchanges. In addition, the hackers managed to steal a part of the data of the exchange's clients, in particular, the two-level authorization codes needed to log into the user account on the Binance website.

The stock exchange warned that some accounts may now be under the control of hackers, and it is possible that those accounts will try to “influence prices” through these accounts.
The company assured that they will conduct a full check of the circumstances of the incident. At the time of verification, Binance suspended acceptance of deposits and withdrawals by customers of the exchange. But trading will continue as usual. The exchange promised to compensate losses of its clients from a special fund intended for such cases.

Interestingly, the hacker attack of the Binance cryptocurrency exchange occurred in the period when Bitcoin returned to active growth after a six-month stagnation. Capitalization of the main digital currency rose to $ 103.4 billion.