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Binance Hacked for $40,000,000 Bitcoin: What Actually Happened and What Next?

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Binance hackers were able to obtain a large number of user API keys, 2-factor authentication codes and potentially some other information as well.

According to Binance, hackers were able to obtain a large number of user API keys, 2-factor authentication codes and potentially some other information as well.

 

Binance Hacked: How did it happen?

The hackers used a variety of techniques including phishing, viruses and other forms of attack. This is not the first time that API keys have been exploited on Binance but the first time they didn’t get bitcoin out. As a result of this intrusion, the hackers were able to withdraw 7000 bitcoins which are worth $40 million.

 

The hack has only hit Binance’s bitcoin hot wallet which contained about 2% of their total BTC holdings and in the light of the hack makes you realize just why exchanges keep only a small percentage of holdings on hot wallets.

 

Binance has reported that all of their other wallets are secure and are unharmed. In the event that something with that statement changes over the coming days and more wallets are found to be compromised, we will update this story. However, at the moment it is being reported that only this wallet has been effected with other major wallets such as Ethereum being safe.

 

The 98% of bitcoins that were not hacked sits in cold wallets which of course has multi-signature withdrawals set up on them. So they should, of course, remain very safe at this time.

 

Some people are freaking out for some reason but to keep it real, there are of course some hardcore Binance haters out there who just want to see Binance burn.

 

Effect on Markets:

Looking at the markets, it seems that the markets are not reacting very much at all.  At the time of publication, bitcoin is still over the $5800 support level and only down by around 1% in the last 24 hours. However, the Binance Coin or BNB is down by more than 5% which is a genuine movement keeping in mind the hack.

 

Some History of Hacks

Let’s start off with Mt.Gox hack which led the hackers to steal a million bitcoin. The second hack which actually brought Mt.Gox down, the hackers took 150,000 bitcoin.  More recent examples are the 2016 Bitfinex hack which led to 120,000 bitcoin being stolen resulting in 36% bail-in from exchange users. However, the real action happened in 2018 when we saw more than $1.1 billion in cryptocurrency getting hacked on exchanges.

 

What if you have Bitcoin on Binance:

If you have or had your bitcoin on Binance, are you now out of pocket? No.

 

Binance will be using the SAFU fund to cover this incident in full. Therefore, no user funds will be affected by this $40 million hack which of course is a pretty awesome move by the exchange and far cry from Bitfinex and their 2016 bail-in where users had to put up their own funds in order to cover the corporate losses.

 

The SAFU fund was established last year and took a small part of trading fees (10%) and put them in a safe wallet as an insurance fund if something like this happened. The move is truly paying off dividends for the exchange.

 

Binance handling it quite transparently:

So far, the hack has been handled by the exchange quite transparently. There is an open dialogue happening with the community which is definitely a very good thing. Only hours after this happened, Binance took to social media saying basically what had happened and trying to communicate with customers.

 

Binance will be conducting a security review which will include all parts of their systems and data which for such a large exchange is surely going to take a while. So deposits and withdrawals will be disabled for up to a week. However, the trading will remain active on the exchange.

 

Justin Sun, the founder of TRON personally posted on twitter he wants to help and support Binance by depositing 7000 BTC  worth of USDT on binance which will be worth the same amount of hacked funds and buy BNB, BTC, TRX, and BTT if Changpeng Zhao (the founder of Binance) agrees. However, Changpeng Zhao responded by saying that the exchange is hurt but not broke and they are going to cover the losses through their $SAFU fund.

 

 

Centralized exchanges will always stay vulnerable. Even the best practices can be overcome. The full-time job of hackers is to try and overwhelm the fences and if they succeed, they get millions of dollars. It is always recommended to keep only a small percentage of your total crypto portfolio on centralized exchanges for trading and keep the rest in your hardware wallets.

#Breaking News

Alert: Congressman recommends bill to ban Bitcoin in the United States

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Bradley Sherman has made remarks for proposing a bill in regards to banning bitcoin and other cryptocurrencies in the United States of America.

During the Financial Services Committee hearing which was held on Thursday, 9th May 2019, Bradley Sherman, the United States Congressman who is serving as a Democratic member of the United States House of Representatives since 1997 has made remarks for proposing a bill in regards to banning bitcoin and other cryptocurrencies in the United States of America.

 

Representative Sherman Calls for a bill to ban Bitcoin

 

During the hearing, Bradley Sherman urged his colleagues to pass a bill that would ban the purchase of bitcoin and other cryptocurrencies in the United States of America. He asked his colleagues to join him to introduce a bill to outlaw the purchase of bitcoin and other cryptocurrencies by the American citizens. He mentioned that America gets a lot of international power from the fact that the US dollar is the standard unit of international finance and transactions throughout the world.

 

Sherman mentioned that clearing through the New York Fed is critical for major oil and other transactions and it is the announced purpose of the supporters of cryptocurrencies to take that power away from the government of the United States and put them in a position where the most significant sanctions that they have on their ramp, for example, would become irrelevant. So whether it is to disempower their foreign policy, their tax collection enforcement or their traditional law enforcement, the purposes of cryptocurrency or the advantage it has over sovereign currency is solely to aid in the disempowerment of the United States in the rule of law.

 

Bradley Sherman also mentioned about the Hamas terrorist organization saying that the official website of the terrorist organization provides detailed instructions on how people can send them donations in cryptocurrency.

 

Bradley said that if you look at the advertising for the boosterism of cryptocurrency, it reads like something between libertarianism and anarchism. He mentioned that the cryptocurrencies don’t let anyone know what you are doing (especially the government).

 

He also regarded cryptocurrencies as ‘The Plastic Gun of Currency“, which according to him means that it can be used for a legitimate purpose but the fact is that the advantage it has over traditional mechanisms is singularly a benefit for those who wish to commit crimes. After this statement, he asked his colleagues to join him in introducing a bill to outlaw cryptocurrency purchases by Americans so that they can “Nip this in the bud“.

 

 

Bradley Sherman, an elected government representative has been a hater of bitcoin and cryptocurrencies for a long time. What do you feel about his statements and interest? Tell us in the comments section below.

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#Breaking News

Bitfinex IEO: Official Whitepaper and Other Updates

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Bitfinex has officially published its whitepaper on the official website of the exchange today. Bitfinex plans to raise $1 billion through an IEO.

After fake whitepapers of the upcoming Bitfinex Initial Exchange Offering flashed all over the web, the company has officially published its whitepaper on the official website of the exchange today i.e. 8th May 2019. Bitfinex plans to raise $1 billion through an initial exchange offering. Also, the exchange is planning to launch a new platform which will be similar to Binance Launchpad and allow pre-vetted blockchain and cryptocurrency projects to commence their token sale on the new platform. The platform (as announced by Bitfinex) shall be launched next month.

 

Bitfinex Initial Exchange Offering: Whitepaper

As reported earlier, Bitfinex plans to raise $1 billion through its IEO. The whitepaper published by Bitfinex, only USDT (Tether) shall be accepted in terms of investment during the IEO. The native coin of the exchange will be called LEO. According to the whitepaper, the Initial Exchange Offering shall be on until the 11th of May 2019.

 

The LEO token shall not be available for sale for the investors in the United States or any citizen of the United States due to the recent lawsuit filed against iFinex, the company behind Bitfinex and Tether by the New York State Attorney General.

 

The IEO shall be kept private for now, however, if the exchange is not able to raise the proposed $1 billion investment during the private sale, then the issuing company (Unus Sed Leo Limited, located in the British Virgin Island- as per the whitepaper) will have the right to sell the remaining tokens through any manner it deems fit and at any time it feels.

 

The tokens shall be sold at the rate of 1 LEO= 1 USDT. However, according to the whitepaper, the issuing company also has the right to accept any other form of payments as well.

 

The investments shall be used for the working capital requirements of the company as well as other purposes of business. Also, the company (iFinex) will be using 27% of the monthly profits to buy back the LEO token from the holders until no token remains in circulation. Apart from this, around 95% of the funds recovered from the Crypto Capital and 80% of the funds recovered from the infamous Bitfinex hack shall also be used to repurchase the tokens from the holders. All the tokens that will be bought back from the holders shall be burnt forever by the company, hence, the token will have a decreasing supply.

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#Breaking News

Alert: Fake Bitfinex Whitepapers all over the internet, Don’t get fooled

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Scammers are creating a lot of fake Bitfinex whitepapers which are being shared all over the social media platforms before the upcoming Bitfinex token sale.

Scammers are creating a lot of fake Bitfinex whitepapers which are being shared all over the social media platforms before the upcoming Bitfinex token sale. The different whitepapers are showcasing the details of the Bitfinex token sale trying to scam investors out of their money.

 

Fake Bitfinex Whitepapers:

According to Dong Zhao, a shareholder of Bitfinex, the current whitepapers that are scattered all over the internet are all fake. The official whitepaper is not yet released by the company. Also, the official name of the Bitfinex token is LEO and not BFX.

 

Only USDT (Tether) shall be accepted during the token sale, BTC and ETH will not be accepted. The total amount to be raised by Bitfinex during the sale of LEO tokens shall be $1 billion.

 

An example of a fake whitepaper has been posted by John Biggs on Scribd.

 

Kindly beware of scammers. We will keep you posted as to when the official whitepaper shall be released.

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