Tom Arran Tom Arran, Thursday 9th May 2019, 3:45 PM GMT+0000
Binance bitcoin

Hackers Rob $40.7 Million Bitcoin from Binance

Binance, a crypto currency exchange, revealed on May 8th, 2019 that hackers stole a total of seven thousand bitcoin from their crypto exchange. Binance discovered the large scale security breach on May 7th, finding that the hackers were accessing API Keys and two-factor authentication codes through the exchanges servers. As such, the hackers managed to withdraw around $40 million in Bitcoin.

This information was released to the public after the exchange tweeted that they are undergoing unscheduled server maintenance. In the tweet he noted that the company would provide updates on the situation shortly. However, they have yet to find out which group of hackers targeted their exchange on such a large scale. Luckily the breach only affects the “Binance Hot Wallet” which only holds 2% of the exchanges total holdings.

The CEO of Binance, Mr. Zhao, commented during his announcement by adding: “All of our other wallets are secure and unharmed. The hackers had the patience to wait, and execute well-prepared actions through multiple seemingly independent accounts at the most opportune time. The transaction is structured in a way that passed our existing security checks. It was unfortunate that we were not able to block this withdrawal before it was executed.”

Due to security protocols built into Binance, the hack immediately triggered internal alarms which allowed for the exchange to react promptly to the situation. Without these alarms, a far larger amount of Bitcoin could’ve been stolen. The company is going to conduct a thorough review of their system and data before re-initiating their depositing/withdrawing services at the exchange. Trading and hedging is still available until the thorough review is complete.

Binance is going to use the “Secure Asset Funds for Users” to cover all losses that their clients attained as a result of this hack. This means that clients, traders and investors won’t be affected by this hacking.

The Market’s Reaction

This hack comes at a horrible time, when Bitcoin was finally starting to be on the rise again since last summer. Unfortunately, the market’s reaction was quick with Bitcoin value dropping by $290 in one night. All other cryptocurrencies received anywhere from a 1% to 10% drop in value across the worlds markets.

LiteCoin was affected dramatically by this hack, with their crypto value dropping by 6%. Binance’s own crypto currency (BNB) dropped by 8% within a single night. The only cryptocurrency that was able to stay in the green, even with immense losses, was Bitcoin.

Tom Arran

Author: Tom Arran

Tom has over 10 years experience on crypto currencies, first mining bitcoin on an old university computer for 20 cents a coin to now day trading bitcoin in between helping to start whichbroker.com. Tom has previously held roles at a leading EU brokerage and provided insight and consultancy work for number of UK banks in Crypto. Tom Arran can be contacted at [email protected], View all posts by Tom Arran

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