Published: Wed, May 08, 2019
Markets | By Otis Pena

Hackers steal $41 million from cryptocurrency exchange Binance

Hackers steal $41 million from cryptocurrency exchange Binance

Credit: ShutterstockBinance revealed on May 7 that hackers stole 7,000 bitcoin-which is worth almost $41 million at the current exchange rate-in a single transaction.

Binance announced that a "large scale security breach" was discovered earlier on May 7, finding that malicious actors were able to access user API keys, two-factor authentication codes and "potentially other info", the exchange's CEO, Changpeng Zhao, said in a letter. There may be additional accounts that have been affected but not yet identified, Binance said.

Binance says: "The hackers used a variety of techniques, including phishing, viruses and other attacks".

The hackers structured the transaction to bypass existing security checks, and Binance was unable to block the withdrawal before it was executed, according to the post.

"In this hard time, we strive to maintain transparency and would be appreciative of your support", Zhao said Tuesday.

The company estimates that deposits and withdrawals will be suspended for one week, but they "will continue to enable trading". "There may be small periods of time where we have to hold trading for a couple of hours here and there for some of the core system upgrades because we actually do need to make some changes in the system".

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While it's been a quasi meme through the crypto community, it seems the #SAFU initiative has pulled through, allowing reassurance for many Binance users.

Bitcoin's price dropped roughly four per cent after the news broke, but given the overall volatility of the cryptocurrency market, it's hard to link the drop to the cyberattack.

For now, Binance will conduct a "thorough security review", and will thus be suspending its deposits and withdrawals for the time being.

The withdrawal triggered internal alarms after it was executed, and Zhao said the exchange froze withdrawals following the discovery. The "online heist" was made possible thanks to a large-scale security breach at the heart of Malta-based crypto giant Binance. "We beg for your understanding in this hard situation", the cryptocurrency company said. "But we believe with withdrawals disabled, there isn't much incentive for hackers to influence markets". The current price of a single bitcoin is $5,815.

Digital currency is offered on a blockchain; the blockchain is meant to be an immutable, unchangeable and permanent record.

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