By James DiGeorgia
Just as Bitcoin has started to recover from its nose dive and broke back over US$6,000 the head of Binance, CEO Changpeng Zhao the world’s largest cryptocurrency exchange announced on his blog post that his firm was the victim of “large scale security breach”. The hackers used a variety of techniques, including phishing, viruses and other attacks” that allowed the theft of over US$40 million. He went on to say…
“The hackers had the patience to wait, and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time. The transaction was 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.”
Zhao included in his post the electronic history of the theft showing the hackers stole more than 7,074 bitcoins, worth $41.6 million. The hackers targeted Binance’s “hot wallet,” which is connected directly to the internet and which holds according to Zhao about 2% of the exchange’s bitcoin holdings.
Zhao attempted to reassure depositors Bitcoins by writing…
“All of our other wallets are secure and unharmed”
Zhao also assured depositors that Binance would cover all losses “in full,” but deposits and withdrawals were suspended pending a “thorough security review” that is likely to take a week.
Binance has become an enormous player in Bitcoin and ranks No. 4 worldwide in trading volume over the past 30 days, but a 26% drop in trades downgraded it to No. 13 for the past 24 hours, according to the CoinMarketCap website.
Binance was founded in Hong Kong in 2017 but has announced it is moving to Malta amid a crackdown by Chinese regulators.
CyperTrace security says the danger of Bitcoin depositors being robbed by online Cybercrooks has become an enormous problem. In 2018 hackers stole an estimated $1.7 billion in cryptocurrency a jump of more than 400% from 2017, according to security firm.