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Wednesday, 08 May 2019 10:51

Binance cryptocurrency exchange hacked, 7000 bitcoin stolen Featured

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Binance cryptocurrency exchange hacked, 7000 bitcoin stolen Pixabay

Global cryptocurrency exchange Binance has suspended all deposits and withdrawals after discovering a large-scale security breach on Tuesday.

The attackers have been able to obtain a huge amount of user API keys, 2FA codes and possibly other information, Changpeng Zhao, the founder and chief executive of the company, said in a blog post.

The attackers managed to withdraw 7000 bitcoin in one transaction from Binance's BTC hot wallet which contained about 2% of the total BTC holdings.

"The hackers had the patience to wait, and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time," Zhao wrote.

"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."

Zhao said a major security review would be conducted and it would take about a week.

"We will continue to enable trading, so that you may adjust your positions if you wish," he said.

"Please also understand that the hackers may still control certain user accounts and may use those to influence prices in the meantime.

"We will monitor the situation closely. But we believe with withdrawals disabled, there isn’t much incentive for hackers to influence markets."

Commenting on the breach, Tyler Moffitt, senior cyber security analyst at security outfit Webroot, said: “This was a very sophisticated attack co-ordinated by a group of skilled criminals with a lot of organisation and patience.

"While last year’s attack on Binance failed to yield any cryptocurrency for the attackers, it appears this attack was more successful, as they used a variety of techniques to infiltrate the Binance hot wallet and make a very sizeable withdrawal."

Moffitt said while it was promising to see Binance’s commitment to transparency, such a significant attack was a reminder that the emerging cryptocurrency market was faced with rapidly evolving threats from sophisticated actors.

"This reminds us of the importance of keeping cryptocurrencies in wallets where owners control the private keys," he said. "As cyber attacks on exchanges become more common, traders should only use exchanges to make trades, then remove the funds from the platform and store them in cold wallets as you would a physical wallet.”

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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