It was reported on Tuesday, 7th of May 2019, that hackers have stolen almost 7000 Bitcoins from the world’s largest and best Bitcoin exchange, in terms of sheer volume, known as Binance. The company had announced that on May 7 2019, the company had discovered a large scale security breach. It was found out that hackers were able to access the API keys of various users, along with two-factor authentication codes and other important information as well - as said by the CEO of the company, Changpeng Zhao, in a letter. Due to this hack, about $41 million has been drawn in terms of Bitcoin value from the exchange, which is according to the transaction published in the security notice.

The main disclosure came after the CEO tweeted that the exchange was under unscheduled maintenance. Zhao also said that a full detailed report will be provided shortly after the update. Binance hasn’t been able to yet identify all the main impacted accounts, and according to the statement released by Binance, the main breach has only impacted the hot wallet of Binance. The Binance hot wallet contains about 2 per cent of the overall exchange’s Bitcoin holding. Therefore, all the other wallets of Binance are fully unharmed and secure as well.

The hackers had planned an well-executed attack, which had come through multiple independent accounts. The transactions were structured in such a way that, they passed the existing security checks of the company in place. Binance was not been able to block the attack. Internal alarms were triggered after the withdrawal and after the discovery, the company had frozen all withdrawals. Even though withdrawals and deposits do remain suspended for all of next week, trading will still be enabled again. However, the company’s CEO also warned users that the hackers still might be in control of some user accounts. In the next week, the company will be conducting a thorough review of all of its systems and data as well.

In order to make up for this loss, the company will be using its SAFU Fund or commonly known as Secure Asset Fund for Users - which will definitely not at all impact its users. This fund contains about 10 per cent of all the trading fees that the exchange has set aside, and was mainly launched in order to protect the investments of Binance users, in very extreme cases. This fund is stored in its cold wallet. The company’s CEO has asked for the support of the users and the company will be maintaining its transparency. He also took part in a previously scheduled AMA or Ask Me Anything on Twitter.

How the market reacted?
Bitcoin, the world’s premier cryptocurrency, has seen a drop of almost $290 in value along with other cryptocurrencies as well - which are down by 1 to 10 per cent, during the time of the report.

Both Ethereum and Litecoin has seen a drop of 4-6 per cent. Binance’s native cryptocurrency of the company, known as Binance Coin or BNB is alow down by 8.05 per cent. The price of BNB fluctuated between $22 and $25.40 for 18 successive days, before going down. The highest recorded was $26.44, which was on May 3rd 2019.