How Much Did the Binance Heist Thieves Lose?
Binance did not disclose how much money the thieves lost during the attempted Heist on March 7, but I have away to estimate the amount.
One of the world's biggest cryptocurrency trading platforms was targeted by thieves this week. Rumours of a Hack on Binance spread like wildfire and panic followed as Binance suspended withdrawals. After the incident, Binance said its cyber-security team had intervened in time after spotting the suspicious trading activity. Reportedly, the heist backfired causing the would-be thieves to lose money.
How the Heist should have worked:
The thieves used a Phishing domain that looked like Binance.
Notice the dots under the "i" and "a"?
This phishing website was used to fool the user to provide their API Key for Binance. This website would only work once to for the user to hide the website existence.
What are API Keys?
They are used for traders to exercise trades utilizing alternative trading software. In other words, a trader doesn't actually need to log into the exchange. All they need is the API Key to control trades. The API keys wouldn't allow the thieves to drain the account. Instead, it allowed the thieves to trade and manipulate the market using other people's money.
How the thieves intended to steal money:
The thieves used 31 accounts on Binance and preloaded them with VIA coin. The goal was to use stolen keys to buy up VIA coin using various coins in those compromised accounts. This drove up demand for VIA coin and pumped the price. Then, thieves sold their VIA coin for BTC in each of the 31 accounts to easily double their account value. Withdrawal requests were then attempted from these accounts immediately afterwards
What went wrong for the thieves?
Binance cyber-security system found irregular activity that tipped off Binance's "automatic risk management system". Binance blocked the withdrawal transactions an prevented any heisted currency from leaving the exchange which included the thieves money.
How much did the thieves loose?
Binance hasn't publically disclosed how much the thieves lost, but we can ballpark the figure.
Presumably all 31 of these accounts had the 2 BTC equivalent withdrawal limit. The only way to increase the limit is to add identity verification to the account. The thieves needed to hide their identity so they needed to open multiple accounts without verification. The assumption is that they intended to drive the price up 2X, so they need 1BTC worth of VIA coin in each account. BTC at the time of the attack was worth $10,700. Take $10,700 multiply by 31. Looks like the thieves lost somewhere in the neighborhood of:
$331,700!
Binance has reversed all irregular trades, and Binance’s CEO announced that the exchange will be donating these coins to charity.
Bravo Binance!
So, the predator became the prey! Good job by Binance. They saved Bitcoin and altcoins from dipping even further.
They did a fantastic job. I think other exchanges should take notes.
It's a great notice on the binance.com lol I was highly carried away while I was reading your post. The plan was just like setting trap for the fish in the sea. Bravo lol..
What a great twist of fate that the bad guys try to steal from us and they end up paying instead.
Binance handled the situation in a really professional way. They really are the best crypto exchange in my opinion.
I think that donating the money to a charity was especially professional as well.
Go Binance!
Thanks for sharing this. You just made my day.
You are welcome. It was very amusing for me too.
Binance is the most legit exchange out there. Period
They definitely have my respect.
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Excuse me for acting and I do not want to advertise, I want to know what do you think about this article? I think Steem will go down,should we sell now??
Actually i didn't know any of this until you made post and thank you
That is great that I get feedback that you found it informative. You are welcome.
I wish coincheck was as smart . Imagine the hack happened because a employees pc had malware.
Good job binance . Nice info dude 👍🏾
I'm glad you liked it.
I think coincheck was operating a crudely organized security system and had no real understanding how to prevent hackers from stealing money. Japan wants to lead the world in cryptocurrency exchanges. That is why they said that they would go after the coincheck stolen money and why they offered to pay the victims back their money. Japan is cracking down on exchanges to prevent further hacks and implementing a regulatory commission to ensure exchanges don't get hacked in the future.
Yeah I actually have coins in coincheck, they suppose to start crypto withdrawals next week. Knowing how Japanese clients are with regards to money , I see 90% of the clients withdrawing their crypto and nano s-ing or sending it to bitflyer ( the other big Japanese exchange ).
Yes I heard they will self regulate . The ceo of bitFlyer is the leader of this initiative . Makes sense to self regulate because how can people not in the space know how to do it right ?
Binance held the door. HODR
Fo Sho!