TL;DR: Details are scarce, but CEO Changpeng Zhao (CZ) of cryptocurrency exchange Binance took to social media, announcing how for the second time a “market maker from a smaller futures exchange tried to attack” its futures platform. “NO ONE was liquidated, as we use the index price (not futures prices) for liquidations (our innovation). Only the attacker lost a bunch of money, and that was that.” In recent months, attacks have become frequent against the exchange.
Binance Claims Smaller Futures Exchange Market Maker Attacked Platform
“The attacker is a well-known account that trades with @binance,” CZ added, “and started their own futures exchange a few months ago. This was the 2nd attempt they tried. Shame!” Not too long after, the Binance’s official Twitter account used their CEO’s braggadocio as part of a marketing campaign for a discount on trading fees, prompting some to question the seriousness of CZ’s claims.
Cryptocurrency exchanges are a giant liquidity arm for the ecosystem, something not anticipated in the early days of Bitcoin. The evolution and success of exchanges continues, as platforms have embraced more exotic forms of trading, from stablecoins to futures to their own tokens and even Initial Exchange Offerings (IEOs), among many other innovations. For the space, exchanges are also points of failure, honeypots, as hacks going to back to the infamy of Mt. Gox in 2014 (still playing out today) to the present investigation of QuadrigaCX over the loss of hundreds of millions in users’ funds.
— CoinSpice (@CoinSpice) May 8, 2019
Indeed, Binance itself only four months ago fell victim to a 7,000 BTC hack, at a cost of $40 million (at the time), which prompted apologies and a CZ request for rolling back the chain to recover funds (see tweet, above). He would later recall the hack as a learning experience, hoping not too much damage was done to Binance’s reputation. Just last month, Binance ran into another problem, this time involving an extortion attempt and users’ personal KYC information being exposed.
Through it all, Binance muddles on, thriving even. It remains one of the largest of its kind by volume, and continues to announce expansion into coveted trading countries such as the United States. Ironically, earlier this month, the company also began a competition among users to try their two Binance Futures Testnet platforms, insisting 10,000 of its native token would be given away in the process. No word yet as to whether that campaign played any role in the latest supposed attack.
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