Binance Hacker Consolidates Stolen Bitcoin to Seven Addresses

The hacker(s) who performed a large-scale security breach on Binance, the world’s largest crypto exchange in terms of trading volume, have now transferred the 7,070 Bitcoin (BTC) they stole to only seven addresses.

Hackers Also Obtained Users' 2-Factor Authentication Codes And API Tokens

On Tuesday (May 7th, 2019), Binance suffered a damaging hack in which hackers managed to not only steal bitcoin’s valued at over $40 million, but they also reportedly gained access to users’ 2-factor authentication codes and API tokens.

According to a report published by The Block on May 9th, 2019, the stolen Bitcoin was transferred from Binance’s hot wallet on Tuesday via a single transaction - which consisted of 44 outputs. Notably, 21 of these were Segwit, of Bech32, crypto addresses and 99.97% of the funds have been moved to them.

Moreover, the hacker(s) have now consolidated the stolen bitcoins from the 44 crypto addresses to only seven addresses. At present, six of these addresses hold 1,060.6 BTC and one address is holding 707.1 BTC.

The addresses reportedly containing the stolen BTC are as follows:

  1. bc1q3a5hd36jrqeseqa27nm40srkgxy8lk0v0tpjtp (Bech32 address holding 707.1 BTC)
  2. bc1q2rdpyt8ed9pm56u9t0zjf94zrdu6gufa47pf62 (Bech32 address holding 1,060.6 BTC)
  3. bc1qx3628eh9tdnm0uzculu8k6r2ywfkc5zns2hp0k (Bech32 address holding 1,060.6 BTC)
  4. bc1qnf2ja3ffqzc3hskanjse6p8zag52fm6jgmmg9u (Bech32 address holding 1,060.6 BTC)
  5. bc1qw7g5uxxl750t0h2fh9xajwuxp4qt634yh3vg5q (Bech32 address holding 1,060.6 BTC)
  6. 16SMGihY94H8UjRcxwsLnDtxRt7cRLkvoC (P2PKH address holding 1,060.6 BTC)
  7. 1MNwMURYw1LkPnnpda2DQkkUsXXeKL9pmR (P2PKH address holding 1,060.6 BTC)

Before The Block confirmed the list of addresses above (which currently contain the stolen funds), Confirm, a London-based anti-money laundering and counter-terrorism (AML/CTF) firm had revealed via Twitter that it found that 1,227 BTC was initially moved from the Binance hot wallet to two other crypto addresses, one of which contained 520 BTC and the other held 707 BTC.

Binance CEO Considers Chain Reorg After Hack

Following the 7,070 bitcoin hack, Binance CEO Changpeng Zhao (or “CZ”) had initially proposed the idea of performing a chain reorg - which could reverse the set of transactions made by the hacker(s). This, CZ had first said, would help recover the funds and serve as “revenge” against the malicious actors.

However, the crypto entrepreneur decided not to attempt a chain reorg after consulting with various experts in the cryptoasset industry.

CME Looks to Double Bitcoin Futures Limit, but Is This Wise?

The Chicago Mercantile Exchange (CME) has a new request for its regulator, as it looks to double open position limits on bitcoin futures contracts in the face of significant interest.

Nasdaq reports that the CME has already petitioned its regulatory body, the Commodity Futures Trading Commission (CTFC), asking for an increase from 1000 contracts per spot month to 2000 per investor. Each contract represents five BTC, so essentially, at its peak,  a single investor's total position may edge towards a monumental 10,000 BTC.

This is in direct response to the contract's recent growth which is currently depicting record levels of activity, citing $370 million being traded per day. A spokesperson for the CME noted that the idea to increase limits was proposed on the continued maturity of the market:

Based on the significant growth and acceptance of our financially-settled CME Bitcoin futures markets, as well as our analysis of the underlying bitcoin market.

However, as Nasdaq writes the increase in the upper limit of positions is somewhat superfluous. As of July, the number of open interest contracts reached an all-time high of just 6100; given this, it seems the CME may be future-proofing.

Open to Manipulation?

However, concerns remain about the limit increase, as without them, the potential for manipulation rises; often to the detriment to the underlying asset. Although, as per the CTFC website, the threat of manipulation from bitcoin futures contracts is "low":

In general, position limits are not needed for markets where the threat of market manipulation is non-existent or very low.

Instead, Nasdaq posited that this might point to a lessening on the CTFC's strict rule of bitcoin; as well as a maturing of the market in general.

Nevertheless, some believe the CME's bitcoin futures contracts do pose a significant threat to the price of BTC; with some suggesting that blatant manipulation continues unchecked within the market.

As reported, there seems to be a correlation between the expiry dates of CME bitcoin futures contracts and a lull in the price point of BTC. In several instances, a significant drop in bitcoin's price has coincided with a closure from the CME. The most recent example of this occurred on Labor Day, September 2, when bitcoin rose an extraordinary 8% shortly after the CME shut.

Crypto analyst, Alex Kruger, highlighted this, noting the large gaps which formed on the CME chart, from the price discrepancy before and after closing.

This has become a pretty accepted practice within the market. Kruger has even gone to the lengths of compiling statistics each time this phenomenon transpired:

On these occasions, bitcoin cited an average 4.6% price discrepancy following the close of the CME.

Whether this is a coincidence or the market is indeed being actively manipulated is as yet unclear. Either way, with the increase of these limits it might be only a matter of time until we know for sure.

Featured Image Credit: Photo via Pixabay.com