- Alleged Fake Yobit Admin Transferred Huge Portion Of Stolen Funds Into Binance Hot Wallet
- Binance only screwing up, funds withdrawal was probably not a hack
The unexpected hack which hit Binance as a “large scale security breach” did not only hurt the exchange, but also the entire crypto community as the attack dragged the trust in the exchange into mire.
Yesterday, Binance reported that through access to users’ 2FA codes, API keys and other important info, some hackers have been able to cart away 7000 BTC circa $42 million.
Even though Binance tried to reassure users that “funds are #safu” adding that the withdrawn funds only represent 2% of the company’s BTC holding and other wallets are secured, the stunning event still gives the crypto community much skepticism about the exchange.
In a much derogatory distrust, an analyst known as Crypto Medication on twitter, after series of research on the attack, said the event “probably wasn’t a hack but rather Binance just screwing up.”
A Comprehensive Research On Binance 7000 BTC Attack
In the beginning, Crypto Medication clarified that he leveraged the transaction ID provided to get all important details about the attack. After using the visualization feature on blockchain.com, he identified that not all of the funds have been parked.
He said, a particular transaction where funds were sent to 1CQFNdCsDvZgB62eYLgS5q4eNZkZDuhUev address caught his attention, as part of the illicitly extracted funds were sent back to Binance’s hot wallet directly from the above address.
While tagging the deposit of fund on Binance’s hot wallet a bizarre, Crypto Medication said it is unusual for ‘anyone to send to Binance’s hot wallet directly’ except for those who know Binance.
After visiting Blockchain.com, the researcher claimed that funds sent from the address 1CQFNdCsDvZgB62eYLgS5q4eNZkZDuhUev to Binance was part of the larger illicit transactions since Binance said all funds mined from the exchange in the hack TX ID provided were illegitimate.
More cluster information about the address on BitcoinWhosWho revealed that the ‘user had already been reported as the admin of Yobit’.
Meanwhile, Vinny Lingham, the CEO and Founder of Civic, does not believe we are in a bull run, claiming the bounces are not worth buying.
He said on CNBC Crypto Traders, that Bitcoin’s not set for a bull run until it price surpassed $5,700 to $,6200 and stayed in that range for one or two days.
Alexander Warden, who claims to be a Yobit admin was reported to be a scammer in a Bitcointalk post.
In a concluding statement, Crypto Medication opined that since the address which sent funds back to Binance’s hot wallet holds a huge portion of the illicit transactions, Binance is only screwing up and the fund withdrawal was probably not a hack.
Hackers Beat Binance Exchange with Phishing and Viruses, Withdraw Relatively $40 Million
The fact everyone in the crypto space cannot shy away from is the presence and availability of hackers and fraudsters in the space. Binance, arguably the largest exchange in the world recently underwent a devastating loss after some professional hackers beat its compact security, carting away with 7000 BTC, which is relatively $40 million at press time.
The capital security breach reportedly occurred on 7th May, 2019. Due to the major breach in security, Binance exchange has decided to suspend all scheduled withdrawals and proposed deposits for about a week in order to allow proper investigation and security review.
Although, Binance stated that trading will still continue so as to give traders means to effect major adjustments to their trading accounts.
Changpeng Zhao, Binance founder and CEO pleaded with his able investors and users to be patient with the system as some accounts would still be under the control of the desperate hackers. He also said it could have effect on the price for an interval of time, but reassured that everything will be under control sooner than later.
Read Zhao’s statement below:
“Please also understand that the hackers may still control certain user accounts and may use those to influence prices in the meantime. We will monitor the situation closely. But we believe with withdrawals disabled, there isn’t much incentive for hackers to influence markets.”
How the Hackers Breached Binance Exchange Security System
As reported by Binance Exchange, the transaction was made at once after the hackers discovered a loop hole in the system, which resulted to the withdrawal of 7000 Bitcoin (BTC).
According to Binance, the hackers used diverse means such as viruses and phishing to get a number of information including Two Factor Authentication (2FA) codes and API keys.
Binance exchange stressed that the hackers broke into its Bitcoin (BTC) hot wallet which constitute just 2 percent of its total holdings, assuring that all other wallets are safe.
Justin Sun Promises to Support Binance Exchange
Justin Sun, the CEO of Tron (TRX) has swiftly responded to the tragic incident. Sun promised to personally support Binance with a deposit of 7000 BTC worth around 40 million USDT, purposely to buy Binance (BNB), BitTorrent (BTT), Bitcoin (BTC) and Tron (TRX) subject to Zhao’s formal agreement.
— Justin Sun (@justinsuntron) May 8, 2019
Changpeng Zhao’s Response to Justin Sun’s Proposed Support
Binance CEO, Changpeng Zhao responded to Justin Sun’s proposed support by showing his gratitude to his companion in the business but rejected the offer, claiming that the loss will be covered using SAFU fund.
Zhao quiet accepted that Binance exchange is hurt at present but disclaimed the notion of being broke. He shared that the exchange is working tirelessly to get trading back to action.
Thanks for the support, really appreciate it. But currently no need. We will cover the loss from the #SAFU fund, there is enough. We are hurt, but not broke.
We are working hard to resolve the issue, so that everyone can deposit and withdrawal again. Will take some time. https://t.co/0j4J0fk99W
— CZ Binance (@cz_binance) May 8, 2019
The fact that Binance exchange displayed transparency by getting its customers informed about the hack and the loss unlike Bitfinex, is expected to boost its trust level.