One of the world’s largest cryptocurrency exchanges, Binance, has been hacked. Hackers allegedly stole millions of bitcoins (BTC). The exchange reports this in a official announcement which was published on May 7.
Hackers are said to have stolen about 7,000 bitcoins worth about $40 million. In the announcement, Binance writes:
Hackers managed to obtain a large number of user API keys, 2FA codes and possibly other information. The hackers used various techniques, including phishing, viruses and other attacks. We are still investigating all the possible methods used.
The hackers are said to have been very patient. Once they had access to an account, they didn’t strike right away. They waited until they had access to a large number of accounts, and then they could strike a big blow.
During a livestream on Twitter shortly after the announcement, Binance CEO Changpeng Zhao (CZ) responded to questions from users. In the livestream, CZ stated that the team was considering a so-called rollback to initiate. This means that the transactions made by the hackers are reversed on the Bitcoin network.
However, Binance would need the support of at least 51% of miners to do so. In a tweet after the livestream, CZ reported that the team waived such a procedure.
The CEO went on to say that Binance can absorb the $40 million loss, but that it “still hurts a lot.” Binance could take the blow thanks to the SAFU fund, a special fund that Binance established in July 2018. Since the fund’s inception, Binance has deposited 10% of all transaction costs into the SAFU fund so that it can better absorb blows from hacks or other situations. It is not clear exactly how much is in the fund, but according to CZ it is enough to absorb this blow.
Users are now advised to update their account. In the livestream, CZ advises:
Users need to disable and re-enable 2FA… Reset their API settings create new passwords.
Binance says it needs a week to be sure that the exchange is safe again. Deposits and withdrawals will not be possible during this period.
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