May 10, 2019

Cryptocurrency exchange Binance Hacked On Large Scale, $40 Million+ Worth Cryptocurrency Stolen [Updated With Rollback]

Cryptocurrency exchange Binance Hacked On Large Scale, $40 Million+ Worth Cryptocurrency Stolen [Updated With Rollback]

The latest bitcoin news came from Binance a few days ago when the popular cryptocurrency exchange confirmed a security breach. Binance said that their security has been compromised on a “large scale” and hackers have managed to steal more than $40 million in cryptocurrency. The company said in a statement that hackers managed to steal two-factor codes, API keys, and other sensitive data in the attack.

Binance traced a single wallet for the cryptocurrency theft where more than 7,000 bitcoins were stolen. Binance is the world’s largest cryptocurrency exchange by volume and even a big theft like that has only impacted 2% of its total holdings of bitcoin. However, hackers attacked the company’s hot wallet for bitcoin.

A statement from the company quoted, “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,” the statement further mentioned.

To release users from all its worries, the company said that secure asset fund for users or SAFU will be covering all the losses. Binance has suspended deposits and withdrawals for the time investigation goes on. However, trading is still and will remain open.

Update on the Stolen Bitcoins

Company’s chief executive Changpeng Zhao spoke to Periscope throwing more light on the issue. According to him, the hackers used an advanced technique to pile up huge net worth. He further said that the company is still unaware of the number of users affected in the attack but Binance will recover the lost Bitcoin without any help whatsoever.

Binance is currently working alongside other exchanges to keep hacked bitcoin addresses from depositing anywhere. The company will take time to accept deposits or release withdrawals again as Binance wants to “make sure we completely eradicate any trace of hackers in all our accounts and data and that is a pretty tedious process,” Zhao said. He also encouraged every user to change his or her API keys as well as two-factor authentication.

Zhao was asked about asked about a potential rollback of the situation to which he responded, “to be honest we can do that probably within the next few days but there are concerns that if we were to do a rollback on the bitcoin network on that scale, it may have some negative consequences in terms of destroying credibility for bitcoin, so our team is still deciding on that and running through the numbers and checking everything. We will try to maintain very high transparency.”

He further mentioned that the idea of a rollback came from the Bitcoin community after the cryptocurrency news was confirmed by Binance. He said, “I actually did not know we could do that, but there are serious consequences for doing that, so we will take that very cautiously.”

However, the recent update from Binance CEO Zhao confirmed that there will be no rollback of the bitcoin blockchain.