Binance Loses 7000 Bitcoins In Major Security Breach

A major attack was directed towards Binance, one of the largest cryptocurrency exchanges by daily trade volume, which has resulted in the exchange losing approximately 7000 Bitcoins.

According to the exchange, a single transaction was affected, and as a result hackers were able to withdraw 7,000 bitcoins (BTC) worth $40,705,000 at press time.

Different tactics were employed by the hackers including phishing and viruses to retrieve numerous 2FA codes and API keys along with other information. It looks like this was a major breach that affected only 2% of the exchange’s holdings.

This was confirmed by Changpeng Zhao, Binance CEO, who disclosed that the bitcoins were stolen from the exchange’s hot wallets, which contain only 2% of the exchange’s total bitcoin holdings. He also confirmed that the other wallets remain unaffected for now.

Binance has decided to conduct a security review during which, they will suspend all deposits and withdrawals:

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

Zhao also stated:

“Please also understand that the hackers may still control certain user accounts and may use those to influence prices in the meantime. We will monitor the situation closely. But we believe with withdrawals disabled, there isn’t much incentive for hackers to influence markets.”

However, trading will still be active and is expected to go on as usual. Traders will be allowed to adjust their positions. Zhao, who is quite active on Twitter has decided to host an AMA in a couple of hours to answer questions that the community might have.

After Justin Sun of Tron Foundation offered to help out by depositing 7000 Bitcoins in Binance, CZ said that that won’t be necessary since they will make up for what is lost via their Secure Asset Fund for Users (SAFU) to cover the incident. The fund was created back in 2018, as an emergency fund. This is going to be a difficult time for the exchange but the community is standing with them in solidarity to present a united front against the hackers.