Cryptocurrency Exchange giant, Binance reports $40 Million missing in a Security Breach

This Just In. One of, if not, the largest Cryptocurrency Exchange in the world, Binance, has confirmed that a ‘’large-scale Security breach’’ took place. Binance announced that the Exchange got hacked with a reported 7000 BTC stolen, an estimated worth of $40 Million dollars.

In a single transaction, containing 2% of the company’s Bitcoin holdings was siphoned by hackers through a patient and meticulous attack..

The team spearheading the Exchange have reassured customers and stakeholders a with statement claiming that other wallets were untouched and secure.

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

A breakdown of the Hack

According to the Binance team, the hackers managed to obtain API Keys, confidential data, and 2-factor-authentication codes. Essentially gaining full authorization to funds as part of the coordinated attack.

Changpeng Zhao, the CEO of Binance hosted an Ask-Me-Anything live session on the following day, with the intention of disclosing the incident and next steps whilst also addressing questions asked by the community.

Twitter Fiasco

CZ, who's regularly active on social media platforms, (especially Twitter) has responded to the situation with several tweets.

At one point, he suggested a rollback on the Bitcoin Network, which caused an outrage within the community to question the motive behind such suggestions.

UPDATE

To diffuse some of the FUD caused, CZ has come forward with this Tweet stating that the idea of Bitcoin rollback was suggestion made from community members and that it was up for discussion

During these tough times, Justin Sun, the founder behind Tron, a project aiming to establish a truly decentralized Internet, has pledged to buy $40Million worth BNB, BTC, TRX & BTT tokens on Binance in order to help the Exchange recoup its losses. But despite the generous offer, Changpeng has come forward stating that Binance’s team will take full responsibility for safeguarding user funds. Assuring traders that the company behind Binance has enough resources from its Secure Asset Fund for Users (SAFU fund) for recovering the loss of $40 million for users, though “it does hurt very much”.

Moving Forward

Markets do not ignore some of the biggest hacks that seem to hit centralized exchanges on a regular basis. This isn't a Mt. Gox or Coincheck heist, It still shook the space.

Since CEX often times represent themselves as custodial services responsible for clients fund, this is yet another potential blow to the appeal for exchange adoption.

Moreover, institutions today are likely to pass on the idea of using CEXs, due to the fact that they do not function as traditional exchanges, and there is a high-level of risk that needs to be accounted for, a very complex one too. Add in regulatory complexity across different jurisdictions, it may not appear that the benefits outweigh the risk.

On hindsight, there are potentially promising and better alternatives being developed. These come in the form of exchanges that are more resistant to hacks and central points of failure.