Developing Story – Binance has halted withdrawals as hackers appear to have compromised a number of accounts, selling all altcoins for bitcoin. The apparent hack has lead to a selloff of bitcoin, with the cryptocurrency down 13% to $9,800. The exchange has announced that they are investigating the matter. The incident seems to be limited to a certain type of account, those with API keys, according to a statement made by Binance on Reddit. API keys allow accountholders to automate transactions using customized bots.
All altcoin sales made for bitcoin were made at market rate, though the instability in the market overpowered the effect of increased demand for bitcoin, resulting in an overall decrease in the price of bitcoin. Within about one hour of the event, the price of bitcoin was down over ten percent from its 24-hour high of $11,100.
The price of bitcoin had initially plummeted to $9,551, but began to recover soon after the hack.
First Update: Twitter users are reporting that the target of the hack seems to be a commonly used bot, not Binance itself. This report coincides with the fact that those affected all seem to be accounts with API keys.
Someone hacked the trading bot used by majority of people. #Binance is not hacked
People trading on bots got compromised bots have the api keys.
— Crypto Archer (@Crypto_Archer) March 7, 2018
Second Update: Reports are surfacing of a link between the compromised accounts and a recent pump of Viacoin(VIA). As rumors swirl, suspicion is arising that API keys were compromised and stored over a period of time to be used in a pump and dump scheme. VIA was pumped to over 100 times its pre-pump price, from 2250 satoshis to 250000 satoshis. The hacked accounts may have been used to buy up VIA at inflated prices and while the perpetrator dumped the same coin. The coin may have then been converted into bitcoin at market rate. This story continues to develop.
Purely speculation for now and no hard evidence, but an issue to watch closely today. We’ll report more as the story unfolds.
— 21 Cryptos Magazine (@21Cryptos) March 7, 2018
Third Update: Binance CEO Zhao Changpeng has announced that all user funds are safe.
All funds are safe. There were irregularities in trading activity, automatic alarms triggered. Some accounts may have been compromised by phishing from before. We are still investigating. All funds are safe.
— CZ (not giving crypto away) (@cz_binance) March 7, 2018