One of the largest cryptocurrency and digital asset exchanges by daily trade volume, Binance has gone through a major security breach on May 7, as per a statement shared with crypto media on May 7.
It is to be noted that the hackers used a range of tactics, according to Binance. These tactics include phishing and viruses to get hold of a huge number of API keys and 2FA codes in addition to additional information.
As per the crypto exchange, there was 1 affected transaction. In that transaction, hackers were able to withdraw around seven thousand bitcoins worth $41.16 Million at the time of reporting.
CEO Changpeng Zhao states, in a letter on exchange’s website, that the virtual currency was withdrawn from its hot wallets. He added that the hot wallets possess only two percent of the crypto exchange’s total BTC holdings. Zhao further mentioned that Binance’s other wallets are unaffected.
It is to be noted that the exchange will suspend all deposits and withdrawals while it carries out a security review on its systems. Zhao estimates the review to take up to one week. Notably, trading will still be active and all the traders will be able to amend their positions. Zhao states that the hackers may still control several user accounts and may use those to manipulate prices in the intervening time. He adds that they will monitor the state of affairs closely. However, he said that with withdrawals disabled, there isn’t much enticement for hackers to influence markets.
Interestingly, Binance will use its Secure Asset Fund for Users to cover the incident. The popular crypto exchange formed the fund in July 2018 as a sort of emergency insurance. Binance allocates ten percent of its total trading fees to finance Secure Asset Fund for Users.