Breaking: Binance Loses 7 Thousand Bitcoins (Yes, 7,000 BTC) in Exchange Hack, Worth $41 Million

  • Binance, one of the most popular exchanges, experiences hack of 7,074 BTC
  • Popular crypto trading platform tweeted server maintenance only to suffer attack
  • CZ promises to cover losses with #SAFU Fund

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.

Binance suffered a large-scale security breach today, according to a statement. The hackers managed to obtain API keys, two-factor authentication codes and other information. In addition, 7,000 Bitcoin ($ 40 million) were withdrawn in a single transaction.

The hackers used multiple techniques, including phishing attacks and computer viruses to reach Binance and their hot wallets, where they kept the funds to manage the daily operation of the exchange. The hackers could not access Binance's cold wallets, the offline portfolios where most of the customer funds are kept. Likewise, the portfolios of individual users were directly affected.

According to the statement:

“The hackers had the patience to wait and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune moment.”

The company reported that it maintains an emergency fund for these eventualities, called Safu, which will be used to cover the stolen Bitcoin.

“The above transaction is the only affected transaction. It impacted our BTC hot wallet only (which contained about 2% of our total BTC holdings). All of our other wallets are secure and  unharmed.”

As usual in the exchange hacks, the infraction was announced through a tweet of “unscheduled server maintenance”. That alarmed several Twitter users, who sent a message to CEO Changpeng Zhao, wondering if the exchange had been hacked.

Justin Sun of Tron (TRX) jumped in to offer up some funds to help cover the loss as well:

To see the full update, go here. CZ will be doing an AMA (Ask Me Anything) in a couple of hours.

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