Binance Loses 7000 BTC in Hack; WeChat Bans Crypto Trading; Milestone for Ethereum 2.0 as Testnet Launched

The crypto industry has grown accustomed to seeing Binance dominate headlines, and today was no different. What was, however, was the contents of the news itself. Indeed, for the first time in its near-two-year-long existence, the world’s largest cryptocurrency exchange was hacked for 7,000 BTC.

Believe it or not, other significant news stories broke today. Among them, reports that Chinese messaging giant WeChat has updated its payment policy to state that users engaging in crypto trading will be banned. More positively, Prysmatic Labs released the first staking-enabled testnet for Ethereum 2.0.

In the markets, bitcoin (BTC) retraced 1.81% for the day to $5,887.04. As for ether (ETH), it slumped 5.32% to $170.06. The MVIS CryptoCompare Digital Assets 10 Index also fell 0.65% to 2,854.90 as at time of writing.

Cryptocurrency market update

Binance Loses $40.7 Million Worth of Bitcoin

Top-tier cryptocurrency exchange Binance reported a hack totalling 7,000 bitcoin (≈$40.7 million) was discovered late-afternoon on May 7. In an official statement, Binance co-founder and chief executive Changpeng ‘CZ’ Zhao said “one transaction” was all that was used by the hackers, who were able to obtain large volumes of user information including API keys and two-factor authentication codes. In order to compromise user accounts, the hackers “used a variety of techniques, including phishing [and] viruses,” the statement pointed out. To fully cover the loss, Binance will use its Secure Asset Fund for Users, a BNB-denominated fund that holds 10 percent of all trading fees absorbed by the exchange. CZ discussed the idea of re-organizing the bitcoin blockchain to undo the hacked transactions, which caused some controversy amongst the community.

Cryptocurrency Transactions Banned by WeChat

Popular Chinese social media platform, WeChat, reportedly announced it will terminate any user accounts involved in cryptocurrency trading. Per sources familiar with the matter, WeChat’s management has revised its payments policy to read “merchants may not engage in illegal transaction such as [those involving] virtual currencies.” The updated policy will come into effect at the end of this month. Ever since China outlawed cryptocurrency exchanges in 2017, messaging apps like WeChat have emerged as popular solutions for prospective cryptocurrency buyers and sellers looking to perform over-the-counter trades.

Prysmatic Labs Releases Ethereum 2.0 Phase 0 Testnet

Ethereum scaling solution developer Prysmatic Labs launched its Ethereum 2.0 testnet. The release marks the first staking-enabled testnet for Ethereum 2.0; a major development milestone, to be sure. In a blog post accompanying today’s release, Prysmatic Labs’ co-founder and team lead Preston Van Loon shared the “next step is to launch v0.6 of the official Ethereum 2.0 specification into [its] testnet.” This, he added, promises to be “a massive improvement, as the research team aims to freeze the spec by June and have something that will represent a more polished version for mainnet release.”

Bitrue Hacked: $4.5 Million in XRP and ADA Stolen, User Funds Will Be Replaced

At around 17:00 UTC on June 26 or 01:00 on June 27 in Singapore, where digital asset exchange Bitrue is based, a security breach occurred, which resulted in a loss of $4.5 million in crypto from the exchange's hot wallets.

Bitrue, which was founded in 2018, has quickly become a favorite with members of the XRP community because of the high degree of enthusiasm, support, and transparency shown by its management towards XRP. One interesting fact about Bitrue is that it supported XRP as a base currency on the day that its trading platform was launched (19 July 2018). 

At press time (07:57 UTC on June 27), visitors to the Bitrue website are greeted with this message:

Bitrue Hack Announcement.png

Around 02:16 UTC on June 27, Bitrue issued an official statement (via a series of tweets) that explained what exactly had happened, how this impacted its users, and what it was going to do next:

  • At approximately 17:00 UTC on June 26, a hacker or group of hackers "exploited a vulnerability" in the exchange's "Risk Control team's 2nd review process" to "access the personal funds of about 90 Bitrue users."
  • The hackers "used what they learned from this breach" to steal around $4.5 million in crypto—more specifically 9.3 million XRP and 2.5 million Cardano (ADA)—from the exchange's hot wallets and moved these coins to various other exchanges.
  • Shortly after the security breach, this attack was detected and trading, withdrawals, and deposits were all suspended on Bitrue, and the three exchanges where the stolen funds were moved to—Huobi Global, Bittrex, and ChangeNOW—were alerted and asked to freeze "the affected funds and accounts." Bitrue has also "contacted the relevant authorities in Singapore to assist us in tracking down the culprit and retrieving the stolen funds."
  • Because initially it was not quite clear what exactly had happened, the message shown above (about "system maintenance") was posted on the Bitrue website... Bitrue wishes to apologize for "this miscommunication" with its users.
  • Bitrue wants to reassure its users that all "heir personal funds are insured, and anybody affected by this breach will have their funds replaced by us as soon as possible."
  • Bitrue is currently "conducting an emergency inspection of the exchange and hope to be live again as soon as possible with log in & trading functionality." As for withdrawals, they will be "offline for a slightly longer period" while the investigation continues.
  • The flow of stolen XRP can be tracked via the XRP Ledger tool at Bithomp:

In communication with CryptoGlobe, Bitrue's support team confirmed that:

  • all user funds are "insured up to a maximum value of 1 million USD per user"; and
  • "trading should be back up within a few hours, and at that time users who were affected will already have their lost funds back in their accounts"

A few hours ago, Bitrue CEO Curis Wang posted this message on Twitter:

UPDATE (08:15 on June 27): Bitrue has just released a statement to media outlets to provide further details about this incident:

  • Of the $4.5 million in stolen crypto, 50% was "moved to private wallets," and the other 50% was moved to five crypto exchanges: Huobi, Bittrex, ChangeNOW,, and The first three have frozen the stolen funds that were moved there (worth around $1.35 million). 
  • "This frozen amount should be recoverable by Bitrue in the future after working with the authorities and exchanges."
  • "After recovering the frozen assets, the net loss will be $3.15 million USD." This total "includes $1.89 million USD lost from individual user accounts, and $1.26 million USD lost from Bitrue’s own hot wallet."
  • "The funds lost by user accounts were insured and will be replaced by Bitrue as soon as the exchange resumes service."
  • "Bitrue plans to re-enable log in and trading services by midnight (Singapore time) June 27, i.e. by 16:00 UTC on June 27.
  • "Withdrawals from the exchange will not be possible until the Bitrue team is confident that any security vulnerabilities have been addressed."
  • "Bitrue will continue the planned launch of the trading of their platform token, Bitrue Coin (BTR), on Sunday 30 June 2019."
  • "Bitrue will analyze their automated systems and manual processes to identify any potential vulnerabilities and patch them before they can be exploited."

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