Hackers have embezzled $41 million (£31 million) worth of Bitcoin from the Binance crypto-currency exchange in a carefully timed heist. The Japan-based Binance Exchange, which stores Bitcoin and other crypto-currencies for members, said hackers were able to steal 7,000 Bitcoins all at once. As a result, withdrawals have now been suspended on the platform and may not be restored until next week.
“We beg for your understanding in this difficult situation,” Binance said.
However, the exchange promises to fully cover the losses from an emergency fund. It also said no user funds would be affected by the theft. Binance say the cyber-criminals who made off with the money, had used numerous techniques to break into the organisation’s systems. These techniques included deploying harmful viruses and phishing attacks to gain security information.
Eventually, they were able to access Binance’s “hot wallet”, which is an online cache of Bitcoins available for customer transactions. The hot wallet contained around 2% of the the firms total crypto-currency assets. Other wallets, however, were left “secure and unharmed.”
The hackers had been patient in their heist, and acquired access to numerous accounts before withdrawing the large amount of Bitcoins.
“It was unfortunate that we were not able to block this withdrawal before it was executed,” Binance stated.
“Once executed, the withdrawal triggered various alarms in our system. We stopped all withdrawals immediately after that.”
The firm is now conducting “a thorough security review”, which is expected to take a week, according to chief executive Zhao Chanpeng. He has also told Binance users to reset their two-factor authentication security measures.
“While it is a very expensive lesson for us, it is nevertheless a lesson,” he said. “It was our responsibility to safeguard user funds. We should own up to it. We will learn and improve.”
The company is also concerned that the hackers may still have the ability to control some user accounts and could use those accounts to manipulate prices.
It is not known who could have conducted the theft, although it is speculated that North Korean hackers were behind it, considering they’ve been accused of some of the largest cyber thefts in the world.
But while Binance is one of the largest crypto-currency exchanges, this incident is not the largest heist in the Bitcoin world. The most recent and biggest case was back in 2014 when Mt Gox was hacked of $470 million.
“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 of Hacker House.
“Cyber-insurance is a common necessity today as identity theft, malware and cyber-attacks are frequently being performed against high-value blockchain and crypto-currency companies.”
Unfortunately, the Bitcoin and crypto-currency community has remained a target for hackers, both amateur and expert. This brings up the question of crypto-currency safety, but luckily Binance seem to have it all covered, which is a relief for all involved.
Story by Emily Clark
Featured Photo Credit: MaltaWinds