Binance Is Back, Baby
The exchange is now one of many that have fallen victim to malicious activity. Others, such as Mt. Gox in 2014 and Coincheck in 2018, boast much bigger losses, so things could have been a lot worse for one of the world’s largest crypto exchanges.
Nevertheless, executives say that while they have the reserves to replace what was lost, the action still “hurts.” The hack occurred on the morning of May 7. The funds were stolen from a hot wallet that was connected to the internet. Immediately following the hack, Binance released a statement to all its customers explaining what had happened and that they had halted all withdrawals, trades and deposits on its platform when it noticed unusual activity occurring.
CEO Changpeng Zhao also took to Twitter regularly to ensure all customers knew what was going on and what was being done to thwart future theft attempts. A variety of methods were used to steal the money, including viruses and phishing.
A statement released by the company reads:
The hackers had the patience to wait and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time. The transaction is structured in a way that passed our existing security checks. Once executed, the withdrawal triggered various alarms in our system. We stopped all withdrawals immediately after that.
To get more of its customers to return, Binance is engaging in a heavy marketing campaign designed to boost bitcoin adoption and related services. Customers have an opportunity to be upgraded to “VIP levels” and potentially earn part of a 50,000 pool of Binance Coin units. As many enthusiasts and traders know, Binance is an exchange that boasts its own currency that’s also a stable coin. A pool of 50,000 would be equal to roughly $1.36 million in USD.
To qualify for a portion of the money, customers must have traded at least one bitcoin (or the equivalent of one bitcoin in other cryptocurrencies) between now and May 18.
Binance Explains How to Protect Your Funds
At press time, it is unclear who is responsible for the hack. The company has stated that it will improve current security protocols by implementing know-your-customer (KYC) tactics. Binance also released commentary regarding how users can better protect their accounts and prevent fraudulent activity. The company explains:
From now until the commencement of trading, users will be able to cancel open orders, process deposits and use other account-related functions… To increase the security and protection of your account, we recommend that you read through ’14 Tips to Enhance Security for Your Binance Account,’ as well as periodically change your password, reset your 2FA, and update your anti-phishing code.