Binance exchange hackers steal bitcoins worth $41m

Bitcoin and Binance
Binance says it will cover the cost of the stolen bitcoins (Image: newsbtc.com)

Hackers have stolen $41m (£31m) worth of Bitcoin in a major crypto-currency heist.

The Binance exchange, which stores Bitcoin and other crypto-currencies for members, said hackers took 7,000 bitcoins in one go. Withdrawals have now been suspended on the platform.

“We beg for your understanding in this difficult situation,” Binance said.

However, the exchange said it would replace the lost cash with the help of its emergency insurance fund.

According to Binance, the attackers used a variety of techniques to break in. They deployed viruses and used phishing attacks to get security information.

This eventually allowed them to access the exchange’s “hot wallet”, an online cache of bitcoins readily available for customer transactions.

The hot wallet contained about 2% of Binance’s total crypto-currency assets. Other wallets were “secure and unharmed”, the firm said.

‘Patient hackers’

The hackers “had the patience to wait” and acquire access to a number of accounts before withdrawing the huge haul of bitcoins, according to Binance.

“It was unfortunate that we were not able to block this withdrawal before it was executed,” the company’s statement read.

“Once executed, the withdrawal triggered various alarms in our system.

“We stopped all withdrawals immediately after that.”

Now, the ability to withdraw funds from the exchange has been disabled and may not be restored until next week.

In a live video chat, Binance’s chief executive Changpeng Zhao sought to answer questions about the hack.

“I haven’t really slept much for the last 29 hours,” he said. “To be honest I don’t feel that well… it’s not a great day.”

However, he told Binance users that he and his colleagues were working to secure the exchange and prevent any further hacks.

And he added that he was asking other exchanges to block bitcoins associated with the hacked wallet from being transferred elsewhere, which would render them largely useless.

While Binance is one of the largest crypto-currency exchanges, the heist is not the largest the Bitcoin world has seen.

In 2014, Mt Gox was hacked to the tune of $470m.

“Blockchain businesses will need to implement controls more commonly seen in the traditional banking sector if they are to win over consumers,” said cyber-security expert Matthew Hickey at Hacker House.

“Cyber-insurance is a common necessity today as identify theft, malware and cyber-attacks are frequently being performed against high-value blockchain and crypto-currency companies.”

Source: bbc.co.uk

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