Binance hacked for over $40M worth of Bitcoin


And what does this mean for the future of Binance?

CEO Zhao Changpeng says that 7,000 BTC were withdrawn in a single transaction and the attack which was perpetrated using a variety of methods.

Cryptocurrency trading hub Binance, one of the world's largest, has confirmed it lost about 7,000 Bitcoins (around $57) million) to hackers after its so-called "hot wallet", i.e. one connected to the internet and used to process transactions, was breached, Bloomberg reported on Tuesday.

How did attackers compromise the exchange?

"The hackers had the patience to wait and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time", Binance's blog post elaborated. However, the company noted that it will cover the incident in full and no users' funds will be affected.

SUFU was created in July past year and promised to store 10% of all trading fees in order to cover losses from compromises such as this. However, the Binance Coin or BNB is down by more than 5% which is a genuine movement keeping in mind the hack. "We will maintain high transparency and will take the idea of reorg seriously".

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Although the trade will continue, the $ 40 million leak means that Binance will stop withdrawals and deposits for a week, while conducting a safety audit. The official announcement estimates that this will require around one week before the exchange is fully operational again. Suspending withdrawals will permit staff to investigate the issue more thoroughly, but also added "we believe with withdrawals disabled, there isn't much incentive for hackers to influence markets". We do not need funding help.

While this amounts to just two per cent of Binance Bitcoin holdings, Zhao warned that thhere could be other accounts affected by the hack. "But there're concerns that if we do a rollback on the Bitcoin network at that scale, it may have some negative consequences, in terms of destroying the credibility for bitcoin", Zhao stated.

How did the market react?

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BNB however, didn't get off so lightly, dropping by approximately -9.5% following the news, subsequently rebounding a few hours later.

Data from Europe-based trading platform Bitstamp, which tends to offer Bitcoin price tracking at the lower end of the spectrum, put BTC/USD at $5840 as of press time Wednesday.