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Binance Hacked: Bitcoin Exchange Suffers $40 Million Security Breach

Last Updated March 4, 2021 2:44 PM
Gerelyn Terzo
Last Updated March 4, 2021 2:44 PM

By CCN.com: Binance, the No. 1 cryptocurrency exchange based on trading volume, has been hacked. Changpeng “CZ” Zhao, who is at the helm of the exchange, made the announcement on Twitter after previously sharing that “unscheduled server maintenance” was unfolding. The Binance CEO tweeted  that it “was not the best of days.”

As it turns out, it was much worse than imagined, with hackers making away with 7,000 bitcoins, which at the current BTC price is worth approximately $40 million. The funds were stolen from Binance’s hot wallet, which was comprised of 2% of the exchange’s bitcoin holdings.

Binance issued the following statement:

“We have discovered a large scale security breach today, May 7, 2019 at 17:15:24. Hackers were able to obtain a large number of user API keys, 2FA codes, and potentially other info. The hackers used a variety of techniques, including phishing, viruses and other attacks. We are still concluding all possible methods used. There may also be additional affected accounts that have not been identified yet.”

The glass half full is that Binance has a SAFU fund, which is a Secure Asset Fund for Users. The fund is designed for situations like this unfortunate one, and the exchange made the following announcement:

Binance will use the SAFU fund to cover this incident in full. No user funds will be affected.”

They begged for users’ understanding as all deposits and withdrawals are currently suspended for the next week:

“We must conduct a thorough security review. The security review will include all parts of our systems and data, which is large. We estimate this will take about ONE WEEK. We will post updates frequently as we progress.”

No Time Is a Good Time for a Hack

Binance’s hack is a major setback for the exchange and for bitcoin, which has been beginning to come into its own. The bitcoin price was finally hitting a stride in 2019, and now the crypto market has been rocked by Binance’s largest security breach ever. The bitcoin exchange is in the middle of unveiling its decentralized exchange, and all eyes have been on Binance. CZ’s transparent and immediate communication with users and the broader crypto community didn’t go unnoticed, where investors were relieved more than ever that Binance uses SAFU. As fate would have it, Binance has an AMA scheduled for May 8 with CZ.

Binance says all of its other wallets are “safe and secure.”

This story is developing…click here for a real-time bitcoin price chart.