In recent times, Chengpeng Zhao-led cryptocurrency exchange, Binance, has become somewhat of a prestigious entity in the crypto world. It is not just one of the leading digital exchanges in the space but has also gained tremendous popularity among the crypto-nerds because of its low transaction fees, high liquidity and specials discounts if users pay in BNB (exchange’s native token).
On Wednesday morning Asia time, Binance published a blog post on the medium which shook the whole crypto-mania as the exchange disclosed that they discovered a large-scale security breach into their network.
According to the release, On May 7th at 17:15 (UTC), cybercriminals (the hackers) were able to penetrate the “so-called” secure hot-wallet of the exchange and siphoned off approximately $40M worth of 7000 BTC.
The hackers were able to procure API keys, 2-factor authentication codes and other information through phishing and viruses techniques that helped them to carry out the transaction. The crypto exchange notes,
“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,”
Binance further said in its statement that,
“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.”
Although, digital exchanges getting hacked has become quite a norm these days as according to the Wall Street Journal, up to $1.7B worth of digital currency has been stolen over the years by cyber thieves. But now that becoming the case with the technology like Binance, which is famously regarded as the hyper-secure and impregnable, to get hacked, posed yet another warning to the crypto-nerds that “your money might not be as safe as you think.”
In the wake of this unfortunate incident, the crypto exchange ensures its community that they need not worry whether their funds will be affected. On the contrary, they will be compensated entirely through the exchange’s internal insurance system named “#SAFU fund.” In other words, it is in fact, the company which got harmed from this malicious attack with the loss of almost 2% worth of its BTC reserves.
Crypto-community jumped all over with their offers to help
Soon after the announcement was made, various digital exchanges started to work with Binance to impede any deposits connected with the hacked wallets. Whereas, the community offered their help to the victim via donations. In the meantime, Justin Sun, the CEO of Tron and BitTorrent, also offered his support to his friend (Binance’s CEO CZ) over Twitter (his usual medium for connecting with crypto-mania) to buy $40M worth of BTC, BNB, TRX and BTT that equals the reported theft from the exchange (7000BTC) if Mr. CZ permits.
Chengpeng Zhao though responded with appreciating words for everyone stating that “We are hurt but not Broke” and “we will cover the loss from the #SAFU fund.” His tweet reads:
John McAfee, the digital security expert also came forward to pledge his support for the platform after he heard the unfortunate news. Using his Twitter account, the software mogul while flaunting his 51 years of experience in cybersecurity, offered his help to Mr. CZ.
Interestingly, little time after the help was offered (approximately 2 hours), Binance’s CEO responded to Mr. McAfee by accepting his proposal to benefit from his expertise.
Apparently, both are in communication with each other regarding the issue and hopefully, it will bring a fruitful conclusion to the ongoing Binance hack saga.
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