Binance Suffers “Security Breach” Resulting in 7,074 BTC Lost
One of the world’s largest cryptocurrency exchanges, Binance, suffered a “large scale security breach” on Tuesday which resulted in a loss of 7,074 bitcoin which amounts to over $40 million dollars.
In a statement provided by Binance explains:
“The hackers had the patience to wait, and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time. 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.”
The company claims that they will cover the incident “in full” and “no users” funds will be affected. The hack drew funds from Binance’s hot wallet, which “accounts for about 2%” of the company’s total bitcoin holdings. A hot wallet is a wallet that stores cryptocurrency online whereas a cold wallet stores cryptocurrency offline. Currently, while trading can still occur, withdraws and deposits are suspended.
The hack of Binance makes it the sixth largest exchange hack in history. In total, $1.35 billion has been stolen from exchanges that have experienced a hack. Considering the growth of Binance, many see this hack as a relatively minor one, where the exchange will be able to recoup their losses with ease.
As always, this should be a reminder that cryptocurrency should not be stored on an exchange. Even if it wasn’t stolen, users do not have access to their cryptocurrencies as the exchange can, at any time, restrict withdraws. While some people who trade must, by necessity, leave some cryptocurrency stored on exchanges, cryptocurrency used for any other reason is best stored offline, in a cold wallet such as a Nano ledger or Trezor.