Binance Hack: What Went Wrong And Where They Stand?

Binance Hack: What Went Wrong And Where They Stand?
Binance Hack: What Went Wrong And Where They Stand?

If history has taught us anything is that nobody is 100% protected against hackers, despite all the security measures they may take into consideration when developing and updating their platforms. Not even the biggest companies are completely shielded against hackers, especially when their entire business relies on the handling and transaction of cryptocurrencies. This is the case for Binance, one of the biggest crypto exchanges today. According to a public statement, Binance admitted to having been subjected to a hack. According to Binance, a vulnerability in their security protocols was exploited, giving access to hackers to one of their hot wallets used for trading.

Unfortunately, hackers were also able to access some API keys and 2FA codes, which represents a considerable risk for Binance. The technique used by hackers is still unknown and the crypto exchange is currently investigating all potential threats to identify the exact way their system was hacked. The hackers were able to steal over 7,000 Bitcoins (BTC) worth approximately $40 million in a matter of minutes. After the hack took place, the 7,000 BTC were split into multiple wallets making it more difficult to track. This is the 6th largest hack in crypto history, representing 2% of Binance’s Bitcoin stock. It appears the hacker only attacked this specific hot wallet, and no others were affected by the security breach.

Immediately after the attack was perpetrated, Binance suspended all deposits and withdrawals as a security measure to avoid more cryptos being stolen.  Just a few hours after the news broke, Justin Sun published on Twitter his intention to personally cover for the losses, depositing 7,000 of his own BTC into Binance.

According to reports, the amount stolen may seem massive to us humans, but for Binance, it only takes 47 days to recover those losses, being the 6th largest crypto exchange in the world, it makes over $800k per day. Luckily for Binance, they have what they call SAFU, the Secure Asset Fund for Users which is an emergency insurance fund. The CEO of Binance went on to thank Justin Sun for the gesture but refused the help thanks to this specific reason:

As of today, Binance is working tirelessly to recover some of its stolen Bitcoins:

Sadly, cryptocurrency exchanges continue to be vulnerable to hackers given that they handle assets in real time, some cryptos will have to be on hot wallets in order for transactions to be processed. It is because of situations like this that governments have taken negative stands towards cryptocurrencies, and have straightened their regulations towards cryptocurrency exchanges.