Binance Thwarts ‘Large Scale’ Theft Attempt That Sees Hackers Lose Their Funds

  • Hackers attempted to manipulate the market by creating Viacoin buy orders with phished accounts
  • Using their accounts, they then sold Viacoin at a large premium on the VIA/BTC trading pair and attempted to withdraw bitcoin.
  • The activity triggered Binance's security systems, which halted withdrawals and prevented the hackers from cashing out

Binance, one of the world’s largest cryptocurrency exchanges, recently saw users complain their altcoin balances were being liquidated for bitcoin, and then used to buy a little-known cryptocurrency named Viacoin. According to the exchange, it was all part of a sophisticated theft attempt, that Binance managed to thwart.

Per the exchange’s investigation, a group of “well organized” hackers attempted to manipulate the market and steal user’s funds. Their plot saw them initially launch a ‘phishing’ scheme in early January, in which they purchased domain names resembling Binance.com. They created copies of the exchange’s interface, to trick users into entering their credentials.

Once they acquired people’s login credentials, the hackers created API keys for each account they controlled. These keys are used to trade with bots, and as such only allow those who control them to trade, not withdraw.

After the keys were created, the hackers went silent waiting “for the most opportune moment to act.” Yesterday, the hackers decided it was time to make their move, and started using people’s API keys to place a “large number” of Viacoin buy orders. The move saw the cryptocurrency’s price surge by as much as 1,100 percent in about a minute.

VIA pump.png

On their own accounts, the hackers then sold Viacoin for bitcoin at high prices. Their orders were matched because of the orders placed on the accounts they phished. Per Binance, as soon as these trades were completed, withdrawal requests were “immediately” attempted.

However, the unusual trading activity triggered Binance’s “automatic risk management system.” The system, as Binance’s summary reads, halted withdrawals:

“However, as withdrawals were already automatically disabled by our risk management system, none of the withdrawals successfully went out. Additionally, the VIA coins deposited by the hackers were also frozen. Not only did the hacker not steal any coins out, their own coins have also been withheld.”

Binance

The cryptocurrency exchange successfully kept user’s funds safe, and in fact kept the funds the hackers initially used to make their orders. Binance has since revealed that it will reverse most transactions to undo the damage. Some transactions won’t be reversible, however, as the hackers’ accounts were not the counterparty, meaning they were just made to boost Viacoin’s price.

Interestingly, the company’s CEO, Changpeng Zhao, revealed that the coins withheld from hackers will be donated to Binance Charity.

Crypto Exchange Bitfinex Attributes Unexpected Outage to ‘Connectivity’ Issues

Earlier today, February 9, Hong Kong-based cryptocurrency exchange Bitfinex went down for about two hours, at a time in which most top cryptocurrencies were moving up. To clarify the situation to its users, Bitfinex has now attributed the outage to ‘connectivity’ issues.

After the exchange went down, the company revealed via microblogging platform Twitter that its platform was unavailable to “some of its users,” but soon clarified it was unavailable to everyone.

Soon after, the exchange brought its platform back online and revealed the issue was related to “connectivity.” In a blog post clarifying the occurrence, Bitfinex claimed it understands downtime can be “incredibly frustrating,” especially during times in which the crypto market is moving a lot.

The exchange went down as LTC’s recent price jump, which saw it gain over 30% in a 24-hour period, was helping the crypto market add over $10 billion. Its post reads:

Our team identified and responded to the situation immediately and worked unremittingly to bring full service back as quickly as feasibly possible. Your safety is our top priority and we can confirm that all funds were safe during this period.

To help traders deal with the issue, Bitfinex then called all of its support staff online to handle customer queries. Per the cryptocurrency exchange, the issue has been resolved and is being investigated “to prevent a repeat.”

The incident scared various cryptocurrency traders, as some believe Bitfinex – which shares management with Tether – may be insolvent as they claim the firm doesn’t have the $2 billion USD to cover all USDT tokens in circulation.

Late last year, the crypto exchange halted fiat deposits, which saw BTC be traded at a premium of over $100 against USDT compared to the USD. After the panic caused the Bitcoin-Tether premium to hit an all-time high, Bitfinex put out a statement clarifying the situation.