Unknown hackers 🏴☠️ vs Binance: The battle that shook the cryptocurrency world! The hack that nearly bankrupted the platform
One of the most famous hacks that Binance, the largest cryptocurrency trading platform globally, faced was in May 2019, where coins valued at approximately 40 million dollars were stolen.
Details of the Binance hack in 2019:
- Date of the incident: May 7, 2019.
- Amount stolen: 7,070 Bitcoin (equivalent to ~40 million dollars at the time).
- Affected currencies: Bitcoin (BTC) only.
- Method: The hackers used phishing and malware techniques to obtain access keys 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 details of some major users (possibly via phishing attacks or spyware).
- They used this data to execute massive withdrawals.
2. Exploiting hot wallets:
- Binance was keeping a small percentage of its assets in hot wallets (online) to facilitate fast trading.
- The hackers targeted this wallet because it is more vulnerable to breaches compared to cold wallets (offline).
3. Consecutive withdrawals:
- Several large withdrawals were executed within minutes, as the hackers succeeded in transferring 7,070 BTC to unknown addresses.
Binance's reaction:
- The platform suspended all withdrawals and deposits for a week.
- Compensating 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).
- Improving security: Binance subsequently strengthened its security measures, such as:
- Increasing the use of cold storage.
- Enhancing breach 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 hacks.
- It is preferable to store cryptocurrencies in cold wallets that are not connected to the internet (such as: Ledger or Trezor) instead of leaving them on platforms.
> Do you want to know more about other famous hacks like MT. Gox or Poly Network?