Binance Hacked for 7000 BTC

The cryptocurrency exchange Binance experienced a “large scale security breach” on May 7, 2019. The hackers were able to transport 7,000 (over $40 million) in one transaction from the exchange’s hot wallet.

According to the announcement, hackers were able to capture user API keys, two-factor authentication (2FA), and conceivably other data. At this moment, Binance also doesn’t understand how many accounts have been hit. The hackers applied a variety of methods, including phishing, viruses and other attacks. The exchange is still gathering all potential techniques applied. There may also be extra hit accounts that have not been recognized yet.

Withdrawals are blocked

The company also stated that the withdrawals will be blocked for the next seven days to perform a security check. The hackers were able to withdraw 7000 BTC in this one transaction. Since the hack was reported, the value of Binance Coin (BNB) declined eight percent to $19.88 but has since improved to $21.

Binance to use SAFU

The statement also says that Binance will utilize its SAFU (Secure Asset Fund for Users) crisis insurance capital, to repay accounts influenced by this breach. The company announced it that keeps a crisis fund for these things, called Safu, which will be utilized to meet the stolen Bitcoin.

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

Did Binance Really Get Hacked?

The official announcement also states that all the 7000 BTC was stolen in a single transaction. One of the factors that Binance is pretty careful about is their accurate KYC methods. They have a policy of withdrawal boundaries, classified into three stages. The primary one enables withdrawal of up to 2 BTC, the next of up to 100 BTC, and the third one is probably configured for larger withdrawals and is given after verification by Binance.

So, to receive a withdrawal boundary of up to 100 BTC per 24 hours, the user requires to pass through a severe KYC method which demands a variety of private documentation, as well as an original picture of the person in real time. In other words, unsubstantiated users can only withdraw up to 2 BTC, which is certainly not the problem in the transaction mentioned above.

Just a few days ago, a few crypto users lost money recently through an unlikely breach. Recently, Microsoft services such as Hotmail, MSN, and Outlook have been hit by a breach. It was later learned that the breach was due to an employee’s credentials being compromised, which was used to gain access to customer support account. Using this account, the hackers were able to access information regarding customers email address such as the subject lines of their emails and who they’ve communicated with. But recent revelation shows that the breach was deeper than anticipated and had unintended consequences.

Disclaimer: This information should not be interpreted as an endorsement of any cryptocurrency. It is not a recommendation to trade. The crypto market is full of surprises and overhyped assets. Do your research before buying anything. Do not invest more than you can afford to lose.

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Posted By

Prasanna

Prasanna is a Cryptocurrency/Blockchain writer who loves every slant of cryptocurrency from trading to technology. Cryptocurrency/Blockchain is on the path of changing the world as people know it and Prasanna plans to be there to narrate innovative revolution as it happens.