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Binance Revealed Part of Information of The Hack Attack, Security of Cryptocurrency Becomes the Public Concern

Binance Revealed Part of Information of The Hack Attack, Security of Cryptocurrency Becomes the Public Concern.

Since May 1ST, Bitcoin has risen for a week, reaching a top of over $6,000. As the whole cryptocurrency circle was immersed in the joy of rising, an unexpected hacker attack stopped the rising of Bitcoin.

At 7 o’clock this morning, Binance issued an announcement about some information about the attack. The announcement said that, a large-scale security bug was found in the currency exchange at 1:15 a.m. The hacker stole 7,000 bitcoins from the wallet at height of 575012, and the bitcoin worths about300 million yuan.

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According to the announcement, hacker mainly uses complex technology to attack, including fishing, viruses. Hacker obtains a large number of registered users’API keys (authentication, access control), google authentication 2FA code and other related information, so as to carry out withdraw operations.

Now, the 7,000 bitcoins have been transferred to 40 different wallets, and these addresses have been monitored as no transfer action happens. After that, Zhao Changpeng , the CEO of Binance said in Twitter AMA that

 “large-scale security bugs had been discovered by Binance as early as May 7th, but the bugs were also acquired by hackers, hackers have been very patient to wait until large transactions conducted in the system before they started stealing money”.

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Affected by the incident, BNB fell by 10% in one hour. Prices have now recovered to around $20.8. At the same time, Bitcoin had short-term fall, from the height of $5980 to that of $5800; ETF from $174 to  $166; and BCH from $293 to $277.

According to Binance, the attack only affected about 2% of the Bitcoin owned by its exchange. So it can be estimated that the exchange owns 350,000 bitcoins, worths 12 billion yuan. The hack attack  led to panic in the whole currency circle. Repeated statements were made by Binance and Zhao Changpeng that the attack will not cause a loss for users, and investigations have been conducted.

As Beosin analyzes, the hacker attack was not caused by direct transfer of the private key of the hot wallet, but by the process of withdrawing money. The single withdraw reached 7,000 bitcoins, but the risk control system did not warn.

Wang Dong, the founder of Loopring Agreement, wrote in Wechat about the attack to Binance.

1. Any centralized exchanges have security bugs, which involve not only technique, but also internal control.

  1. The bigger the amount of funds, the bigger the target is, and the higher the security cost for exchange, as hackers have no interest in small exchanges;
  2. At present, the de-centralized exchanges in the market are all failures after they issue products, including the first two versions of road print and all versions of 0x.

Michael Novogratz, a former copartner and founder of Galaxy Digital, expressed his concern about the hack incident. He pointed out that though Binance is the largest exchange in the world, 2% of the stolen amount will also leave a great impact, which is an inevitable result, and will certainly lead to more monitoring by regulators.

For a long time, cryptocurrency has not been recognized by the mainstream.

But today, the news of the hacker attack on Binance appears on the front page of Bloomberg terminal, while the other news on the front page is all about central banks, which shows that the cryptocurrency and blockchain is receiving unprecedented attention.

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However, with the expansion of the cryptocurrency market, hacker’s technology is also evolving, and the means of attack are becoming more and more complex.Obviously, this attack s seems to be a well-prepared attack .For the exchange, it is necessary to keep on-going effort for upgrading the technology of anti-attack and defense.

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