#BinanceSafetyInsights Unknown hackers 🏴☠️vs Binance: The battle that shook the cryptocurrency world! The hack that nearly bankrupted the platform.
Unknown hackers 🏴☠️vs Binance: The battle that shook the cryptocurrency world! The hack that nearly bankrupted the platform.
One of the most famous hacking incidents that Binance, the world's largest cryptocurrency exchange, faced was in May 2019, when coins worth approximately $40 million were stolen.
Details of the Binance hack in 2019:
- Date of the incident: May 7, 2019.
- Amount stolen: 7,070 Bitcoins (equivalent to ~40 million dollars at the time).
- Affected currencies: Bitcoin (BTC) only.
- Method: The hackers used "phishing and malware" techniques to gain access to the platform's hot wallets.
How did the hack happen?
1. Theft of API keys and two-factor authentication (2FA):
- The hackers managed to obtain login data for some major users (possibly via phishing attacks or spyware).
- They used this data to execute massive withdrawals.
2. Exploitation of hot wallets:
- Binance kept a small percentage of its assets in hot wallets (online) to facilitate quick trading.
- The hackers targeted this wallet because it was the most vulnerable to hacking compared to cold wallets (offline).
3. Consecutive withdrawals:
- Several large withdrawals were executed within minutes, as hackers managed to transfer 7,070 BTC to unknown addresses.
Binance's response:
- The platform halted all withdrawals and deposits for a week.
- Compensation for the affected: "Changpeng Zhao" (CZ), founder of Binance, announced that the platform would cover the losses from its own funds through its insurance fund (SAFU).
- Security improvements: Binance subsequently enhanced its security measures, such as:
- Increased use of cold storage.
- Enhancing intrusion detection systems.
What happened to the stolen Bitcoin?
- The hackers attempted to launder money through coin mixing and fragmentation, but some of it was tracked.
- To this day, the identity of the hackers remains unknown, but some analysts attribute the attack to organized hacking groups.
Lesson learned:
- Even the largest platforms are not safe from hacking.
- It is preferable to store cryptocurrencies in cold wallets that are not connected to the internet (such as: Ledger or Trezor) rather than leaving them on platforms.
> Do you want to learn more about other famous hacks like MT. Gox or Poly Network $ETH $BTC