Crypto heist: Hackers steal bitcoins worth $40 million from Binance

Crypto heist: Hackers steal bitcoins worth $40 million from Binance

Hackers stole more than 7,000 bitcoin from crypto exchange Binance, the world's largest by volume, the startup reported Tuesday.

The hack has only hit Binance's bitcoin hot wallet which contained about 2% of their total BTC holdings and in the light of the hack makes you realize just why exchanges keep only a small percentage of holdings on hot wallets. In the post, it was explained that earlier today, "hackers", which remain unnamed, were able to obtain a large number of user API keys, two-factor authentication codes, and "potentially other" tidbits of information, giving them access to users' accounts on the platform, withdrawal permissions included.

"There may also be additional affected accounts that have not been identified yet", CZ helpfully warns. Binance said it found evidence of phishing, viruses and possibly other forms of attack.

"We stopped all withdrawals immediately after that", Zhao said. While trading can continue, all transactions will reportedly take a week to complete.

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However, the exchange said it would replace the lost cash with the help of its emergency insurance fund. Users can, however, still trade on the site, unaffected.

The massive withdrawal triggered all sorts of security alarms at the Japan-based cryptocurrency exchange, but the warnings came too late and weren't enough to stop the transaction from making it through.

Binance suspended deposits and withdrawals even before it announced the security breach, while their CEO claimed that "Funds are #safu". However, Changpeng Zhao responded by saying that the exchange is hurt but not broke and they are going to cover the losses through their $SAFU fund.

"We beg for your understanding in this hard situation", Binance said. We beg for your understanding in this hard situation. However, the exchange adds the proviso that hackers may still be in control of affected user accounts, stating that these bad actors may "use those to influence prices in the meantime". We will monitor the situation closely. Suspending withdrawals will permit staff to investigate the issue more thoroughly, but also added "we believe with withdrawals disabled, there isn't much incentive for hackers to influence markets". A wallet is a digital means of storing cryptocurrency. The current price of a single bitcoin is $5,815. Several companies hoping to cash in on the hysteria even changed their names to include the word "blockchain" - the technology that drives the virtual currency - sparking widespread amusement and mockery.

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