Hackers steal $40.5m from Binance in ‘large scale’ breach; the exchange to cover all losses

Binance discovered a “large scale” breach in its security May 7 that allowed hackers to obtain a number of users’ application programming interface keys, two-factor authentication codes, and potentially other personal data.

Blockchain boffin and Binance CEO Changpeng Zhao / Photo credit: Coinpedia

The biggest global cryptocurrency exchange in terms of trading value also said that hackers were able to withdraw 7,000 BTC (or roughly US$40.5 million as of writing) in a single transaction.

“It impacted our BTC hot wallet only (which contained about 2% of our total BTC holdings),” Binance CEO Changpeng Zhao said in a statement. “All of our other wallets are secure and unharmed.”

The company said it plans to use its Secure Asset Fund for Users (SAFU) to cover the damages, so no user funds will be affected. “SAFU is our emergency insurance fund, where 10% of all trading fees are allocated and stored in a cold wallet,” a spokesperson for the company told Tech in Asia. “The fund was created in July 2018 to offer protection to Binance users and their funds in extreme cases.”

Additionally, Binance plans to conduct a security review, scheduled to run for about one week. During that period of time, deposits and withdrawals are set to be suspended.