Binance Exchange Hacked, $40 Million Bitcoin Stolen

 
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One of the world’s largest cryptocurrency exchanges, Binance, was hacked yesterday and the company confirmed that more than 7,000 bitcoins, worth more than $41 million in today’s market, were stolen. Binance is currently investigating the incident.

Its founder and CEO, Changpeng Zhao, first said that “unscheduled server maintenance” will be performed.

A couple of hours later, CZ confirmed that Binance was hacked as attackers stole 7,074 bitcoins from the exchange’s hot wallet, which contained about 2% of their total BTC holdings.

“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,” said Binance in a statement.

CZ described hackers as “patient” and “well-orchestrated”. They were able to get access to a large number of user API keys, 2FA codes, and potentially other info. As of now, Binance says that only one account was affected.

“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,” added Binance in a statement.

The exchange is currently conducting a comprehensive review of its network, which is expected to take one week. In the meantime, all deposits and withdrawals will be suspended, but trading will be resumed.

Most importantly, Binance confirmed it will use its holdings from the Secure Asset Fund for Users (SAFU) to “cover this incident in full”.

In response, Justin Sun, the CEO and founder of Tron Foundation, offered to deposit 7,000 BTC on Binance exchange as a sign of support for CZ and his exchange.

Last year, Binance was forced to reset its trading API as a precautionary security measure, due to suspicious activities connected to Syscoin (SYS) cryptocurrency. It was reported that more than one billion of SYS coins were transacted in a single block back in March.

A couple of days later, Syscoin explained that its network wasn’t hacked, but actually what happened “was a combination of events that made the situation more sensational than it needed to be”.

As a result of the Syscoin incident, Binance created the SAFU. The fund is designed in such a way that 10% of all trading fees is allocated to fund to offer protection to users and their funds.