Binance CEO Changpeng Zhao has claimed all fraudulent trades that occurred on Wednesday have been reversed.
Suspicions were high earlier this week regarding strange occurrences on the Binance exchange. Multiple users took to Reddit to express concern at highly unusual unauthorized trades happening on their accounts. Clarification has come today with an official release from the exchange and tweets from the company’s CEO.
On March 7th between 14:58 and 14:59 “abnormal trading activity” was detected on one of the Hugely popular Binance exchange’s marketplaces. The automatic risk management system was triggered, and all withdrawals were immediately halted.
The activity was discovered to have been an attempted hack. The attackers had managed to phish multiple Binance account details using a similar URL. Waiting for the right moment, the hackers commanded the hacked accounts to buy ViaCoin at extremely high prices, skyrocketing the price by some several hundred percent. Immediately after the trades had been completed, the hackers tried to withdraw the large pool of Bitcoin they had gathered but were unable to due to the fast-acting alarm system.
Chanpeng Zhou, CEO of the platform, took to Twitter to demonstrate the phishing URL from a users history:
All irregular trades were reversed, meaning that no users of the platform lost any form of funds. What’s evening more interesting however is that the failed attempt actually caused the hackers to lose funds. The attempt to maximize profits by forcing the phished accounts to buy ViaCoin from the attackers at hugely marked up prices backfired, as Binance was able to confiscate the hackers supply of the altcoin. According to Zhao, the confiscated funds will be donated to Binance Charity.
While the exchange is running normally today, traders have been warned to improve their security to avoid phishing attempts. This can be achieved by bookmarking the official Binance URL and never clicking a link to the trading platform. The official statement from the company reminds readers that “protecting our traders is and has always been our highest priority”, and the fast-acting alarm system did just that.
Whilst Binance managed to prevent the loss of its user’s funds, other platforms haven’t been so lucky. Earlier this year CoinCheck lost $530m of traders cryptocurrency, and the BitGrail exchange lost $170m of Nano. Using centralized exchanges can be highly risky, and this week’s events come as a reminder to be extra vigilant and maximize online security.
Featured image from Shutterstock.
Last modified: March 4, 2021 5:05 PM