The world’s leading cryptocurrency exchange, Binance suffered a security breach a few hours ago, losing roughly $40 million in the process. The CEO of the exchange, Changpeng Zhao has assured its customers that their funds are safe as the company would cover up for the loss.
7,000 BTC Stolen From Binance
Binance published a blog post on Tuesday, May 7 revealing that it has suffered a security breach. According to the exchange, the attackers were able to gather a large number of user API keys, 2FA codes and a few more information.
The data were gathered via several means like phishing, viruses and other attacks. Binance added that the attackers stole 7,000 BTC from the exchange in just one transaction. According to the exchange, this transaction was the only one carried out, and it affected Binance’s Bitcoin hot wallet.
The stolen BTC accounts for 2 percent of Binance’s total Bitcoin reserve. While the hack has set off some alarm bells within the crypto space, Binance and its CEO have assured users that their funds are safe.
Binance has been receiving support from the crypto community, with famous figures offering to help out in their time of need. Justin Sun, the CEO of Tron personally offered to deposit 7,000 BTC worth $40 million to the exchange in exchange for cryptocurrencies like BNB, BTC, TRX, and BTT.
While this is a nice gesture, Changpeng Zhao (CZ) thanked Sun but maintains that Binance has funds to cover for the loss. Binance in its report stated that it would use its SAFU funds to cover for the loss, assuring users that their funds would not be affected by the hack.
CZ thanked cryptocurrency exchanges like Coinbase and others that offered to block transactions from the affected BTC addresses. He highlights this point as the unity of the cryptocurrency space in their fight against hackers and fraudsters.
Binance’s Hack Shows Exchanges Are Still Under Attack
Cryptocurrency exchanges have been the target of hackers since the early days of Bitcoin. Exchanges like Mt. Gox, Coincheck, Bithumb, and more have suffered security breaches and loss of funds over the years.
The hack of Mt. Gox ultimately led to the cryptocurrency ending its operations while other crypto exchanges have threaded that part. A few days ago, Singapore-based exchange DragonEx revealed that it was hacked. However, the exchange didn’t disclose the total amount lost to the attackers.
Late last month, South Korean-based exchange Bithumb issued a statement saying that it had lost $13 million to hackers. However, Bithumb suspects that the attack was carried out by an insider. The hacker stole EOS and XRP coins and managed to launder most of the funds to other platforms.
Last year was one of the worst for cryptocurrency exchanges, as roughly $1 billion was stolen from exchanges in 2018. The biggest was that of Coincheck, with the Japanese crypto trading platform losing $530 million worth of NEM tokens to the attackers.
The security breached suffered by Binance is a wakeup call for exchanges to implement better security measures. The Japanese Financial Service Agency (FSA) carries out routine security checks of exchange platforms in the country to ensure that they provide adequate protection against hacks. Regulators in other countries could adopt this method as it will help protect consumer funds from hackers and fraudsters.
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Hassan is a cryptocurrency and stock market writer and enthusiast. The financial world has become his primary interest, with movies and books being some of his favourite pastime activities. He is an investor in many blockchain projects including Bitcoin, Stellar Lumens, Cardano, VeChain, Gifto, and Cindicator. Hassan also writes for important outlets like Blokt.com