Binance, a global cryptocurrency exchange reported a security breach on 07 May and its aftermath. The development came as a surprise considering that the robust measures of Binance had been compromised.
Binance commenced by informing that a large scale security invasion had occurred on its exchange. Hackers were able to steal a number of user 2FA codes, API keys, and other information. The exchange major continued that the hackers used a variety of techniques, including phishing, viruses and other attacks. Binance was still evaluating the possible methods used. Additional accounts being affected was also a point of concern.
While informing that almost 7000 bitcoins (BTC) were withdrawn, Binance cited –
“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 clarified that this incident had only affected its BTC hot wallet which housed 2% of its total BTC holdings. The other wallets were safe and unharmed. Binance emphasized that the SAFU (Securities Asset Fund for Users) would be used to reimburse users. The exchange expressed that deposits and withdrawals would be suspended for a week. This inconvenience was due to the security review that Binance would undertake to assess its systems and data.
As an immediate fallout of this unfortunate episode, many digital exchanges extended their service to identify hacked wallets. The crypto community reached out to offer donations to aid affected victims.
In a bid to offer cybersecurity service, John McAfee, the digital security expert and founder of McAfee Associates tweeted his role. John indicated his presence in the industry for nearly half a century and the expertise he carries. This expression was accepted by the Binance CEO who privately messaged John and fixed a time to meet. Their communication should hopefully bring a fruitful closure to the ongoing proceeding.
.@cz_binance – if I can help at all please let me know. Underneath my clown suit is still one of the most experienced cybersecurity experts on the planet. I've been doing it for 51 years. I am at your service.
— John McAfee (@officialmcafee) May 8, 2019
??? Would love to pick your brain about it. Will DM you and arrange a time.
— CZ Binance (@cz_binance) May 8, 2019
Similarly, in March, another major crypto exchange Kraken announced its initiative to investigate the case of QuadrigaCX and also offer a monumental reward for the best tip-off. Kraken explained the desire of individuals to make use of cryptocurrencies for greater financial freedom and highlighted its presence to provide users a great experience.