Hackers steal $40.7 Million (7,000 BTC) from Binance

In one of the most significant security breaches in bitcoin history, hackers stole 7,000 BTC from Binance, the world’s largest cryptocurrency exchange by volume, on May 7, 2019. The theft amounted to more than $40 million at the time.
 

The hackers executed a sophisticated and well-orchestrated attack that involved a variety of techniques to obtain a large number of user API keys, two-factor authentication codes, and potentially other information. They were able to bypass Binance’s security checks and withdraw the bitcoins to a single wallet.
 

Binance’s CEO, Changpeng Zhao, detailed the incident, noting that the hackers were patient, waiting for the most opportune moment to act. The transaction was structured in a way that it passed existing security checks, which unfortunately led to the withdrawal not being blocked before it was executed. Once the withdrawal was made, it triggered alarms within Binance’s system, and the exchange immediately stopped all withdrawals to prevent further losses.
 

The breach only affected Binance’s hot wallet, which contained about 2% of the exchange’s total bitcoin holdings. Binance assured that all other wallets were secure and unharmed. To cover the loss, Binance used its Secure Asset Fund for Users (SAFU), which is funded by 10% of all trading fees and stored in a separate cold wallet.
 

Following the breach, Binance suspended deposits and withdrawals to conduct a thorough security review, which included working with other exchanges to block deposits from the hacked addresses. The exchange also urged users to change their API keys and two-factor authentication codes as a precaution.