Binance, one of the biggest cryptocurrency exchanges in the world, is currently dealing with a problem, as it’s liquidating user’s altcoin balances at market price, without warning them or getting their consent. On social media, speculators claim Binance may have been hacked.
According to various users on Twitter and Reddit, the cryptocurrency exchange, which often sees daily trading volumes above the $2 billion mark, just seemingly sold their altcoins for bitcoin. Describing his experience, one Reddit user stated:
“WTF is happening! Binance just sold all my alts at market rate and I have got just the Bitcoin now. Is it because of account getting hacked or binance bot issue?
Various victims noted that their coins were then used to buy ViaCoin (VIA) a little-known altcoin that, on Binance, pumped 1100% in about a minute because of the incident. This saw some claim VIA was behind the attack.
ViaCoin on Binance
Affected users claim they’ve checked their login history for evidence of unauthorized access, and found nothing suspicious. Some added that they use two-factor authentication (2FA) as an added layer of security, and yet rumors the exchange was hacked are spreading through social media.
Binance has since revealed there’s no evidence the company has been breached and is investigating the issue. The exchange’s CEO, Changpeng Zhao, took to Twitter to reveal that user’s funds are safe.
All funds are safe. There were irregularities in trading activity, automatic alarms triggered. Some accounts may have been compromised by phishing from before. We are still investigating. All funds are safe.— CZ (not giving crypto away) (@cz_binance) March 7, 2018
In response to the incident, Binance temporarily suspended trading and withdrawals. On Reddit, the company revealed that, so far. the only confirmed victims had registered API keys to use with trading bots. If, through phishing, bad actors got a hold of people’s API keys, they could trade their funds, but not withdraw them.
If this is indeed what happened, then hacker likely used people’s coins to pump ViaCoin so he could launder money through the little-known cryptocurrency. As one trader explained:
“If you can phish somebody’s API keys, then you can trade, but you can’t withdrawal [sic] from their account. So buy some VIA on your account, set a super high sell, then on the phished accounts you control you dump all their alts, then with 100% of their bitcoin you buy your super high sells on VIA, and effectively transfer their BTC ()with slippage) to your account.
However, various Reddit users claim their accounts were affected, although they never used Binance’s API. Some API users, on the other hand, claim their accounts weren’t affected. Rumors of Binance getting hacked affected the cryptocurrency ecosystem as a whole. Bitcoin, the flagship cryptocurrency, has fallen 9.55 percent to $9,698 in the last 24-hour period, according to CryptoCompare.