Binance Reports Large Scale Security Breach: Hackers Obtain Keys, $40 Million

Binance Reports Large Scale Security Breach: Hackers Obtain Keys, Codes, Other Info

TL;DR: “We have discovered a large scale security breach today, May 7, 2019 at 17:15:24,” popular cryptocurrency exchange Binance alerted users minutes ago. “Hackers were able to obtain a large number of user API keys, 2FA codes, and potentially other info. The hackers used a variety of techniques, including phishing, viruses and other attacks. We are still concluding all possible methods used. There may also be additional affected accounts that have not been identified yet.”

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Binance Reports Large Scale Security Breach

Earlier in the day, however, the exchange’s co-founder and CEO Changpeng Zhao (CZ) tweeted a note of caution for those who might be concerned about the inability to withdraw or deposit funds. “Have to perform some unscheduled server maintenance that will impact deposits and withdrawals for a couple hours. No need to FUD. Funds are #safu,” stressing how “trading will not be impacted.”

“The hackers were able to withdraw 7,000 BTC in this one transaction:,” the post detailed. So far, as of publication, the exchange maintains that lone transaction is the “only affected,” impacting “our BTC hot wallet only (which contained about 2% of our total BTC holdings). All of our other wallets are secure and unharmed,” Binance assured.

That translates into nearly $40 million as of today’s BTC prices in lost funds. The exchange further characterized hackers as having “the patience to wait, and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time,” Binance admitted. “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 exchange promises it will “cover this incident in full. No user funds will be affected.” The security review they’re involved in at the moment is estimated to take about a week, and the exchange is promising frequent updates as they go along, while keeping deposits and withdrawals suspended. “We beg for your understanding in this difficult situation,” the company insisted. Some enthusiasts are skeptical of the 7,000 BTC loss claim, suspecting much more might be found to have been stolen.

DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH. 

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