Crypto-heist: Hackers steal 7.000 Bitcoins worth $40 million from Binance!
Binance, one of the largest cryptocurrency exchanges by daily trade volume, has experienced a major security breach on May 7.
Per Binance, hackers employed a variety of tactics including phishing and viruses to obtain a large number of 2FA codes and API keys in addition to other information.
According to the exchange, there was one affected transaction, wherein hackers were able to withdraw 7,000 bitcoins (BTC) worth $40,705,000 at press time.
In a letter on Binance’s website, CEO Changpeng Zhao states that the bitcoins were withdrawn from its hot wallets, which contain only 2% of the exchange’s total bitcoin holdings. Zhao states that Binance’s other wallets are unaffected.
Binance will suspend all deposits and withdrawls while it conducts a security review on its systems, which Zhao estimates will take up to one week. Trading will still be active and traders will be able to adjust their positions. Zhao states:
“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.”
Zhao adds that he will conduct a Twitter AMA in a couple of hours to field questions from the community.
Binance will use its Secure Asset Fund for Users (SAFU) to cover the incident. The exchange created the fund in July 2018 as a type of emergency insurance. Binance allocates 10% of its total trading fees to finance SAFU.
Official announcement: Binance Security Breach Update
We have discovered a large scale security breach today, May 7, 2019 at 17:15:24 (UTC). Hackers were able to obtain a large number of user API keys, 2FA codes, and potentially other info. 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.
The hackers were able to withdraw 7000 BTC in this one transaction: https://www.blockchain.com/btc/tx/e8b406091959700dbffcff30a60b190133721e5c39e89bb5fe23c5a554ab05ea
The above transaction is the only affected transaction. It impacted our BTC hot wallet only (which contained about 2% of our total BTC holdings). All of our other wallets are secure and unharmed.
The hackers had the patience to wait, and execute well-orchestrated 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. Once executed, the withdrawal triggered various alarms in our system. We stopped all withdrawals immediately after that.
Binance will use the #SAFU fund to cover this incident in full. No user funds will be affected.
We must conduct a thorough security review. The security review will include all parts of our systems and data, which is large. We estimate this will take about ONE WEEK. We will post updates frequently as we progress.
Most importantly, deposits and withdrawals will need to REMAIN SUSPENDED during this period of time. We beg for your understanding in this difficult situation.
We will continue to enable trading, so that you may adjust your positions if you wish. 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.
In this difficult time, we strive to maintain transparency and would be appreciative of your support.
PS, I (CZ) will continue the previously scheduled Twitter AMA in a couple of hours.
- CZ
