Another Crypto exchange faces ‘large scale’ theft attempt

0
435

It is barely 24 hours, since we last reported about a theft incident related to Bitcoin mining servers, popular Crypto has reported about bold, “large-scale” attempt by cyber crooks to steal traders’ cryptocurrency.

One of the world’s biggest digital currencies exchanges, Binance told its customers early on Thursday the details of a plot by “well organised” hackers to manipulate the market and steal some of its users’ digital coins.

The unnamed hackers launched a ‘phishing’ scheme in early January, in which they purchased domain names that closely resembled binance.com, according to the exchange’s investigation. “Many users fell for these traps and phishing attempts,” Binance said.

Once traders unknowingly gave up their login credentials, the hackers created so-called ‘trading API keys’. These keys are essentially passcodes that are meant to allow Binance traders to write computer programs that can directly interact with the trading venue (it would be useful, for instance, in systematic trading).

After the keys were created, the hackers went silent and waited “for the most opportune moment to act,” according to Binance.

That window opened just before 3pm GMT on Wednesday.

During a two-minute period, the hackers used the API keys to place a “large number” of buy orders for Viacoin, a lesser-known digital currency. The move contributed to a surge in the price of Via from $2.80 just before the attack began to $6.79 in less than 30 minutes — a 143 per cent increase, according to coinmarketcap.com data.

loading...

The hackers “selected Via, a coin with smaller liquidity, to maximise their own gains,” noted Binance.

As the price of Via spiked, the hackers sold Via in exchange for bitcoin, the world’s most valuable cryptocurrency, using 31 accounts they had preloaded, according to Binance. After the trades completed, withdrawal requests were “immediately” attempted.

Binance said that the unusual activity triggered its “automatic risk management system”, which halted withdrawals. It claimed that the system blocked the hackers from making withdrawals from the exchange.

“So far: All funds are safe and no funds have been stolen,” Binance said.

Still, Binance said that it would not be able to reverse transactions for some users in which the hackers used their account to sell bitcoin in exchange for Via. In these cases, Binance said, the hackers’ accounts were not the counter-party, meaning the trades were likely aimed at boosting the Via price.

The incident came on the same day that US Securities and Exchange Commission issued a warning about cryptocurrencies exchanges. Wall Street’s top watchdog said that its staff have “concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not”.

It warned that “investors should not assume the trading protocols meet the standards of an SEC-registered national securities exchange.”

The hacking attempt on Wednesday against Binance came just a month after an unexpected, and lengthy system outage ignited concern among many traders who worried that a hack had taken place.

LEAVE A REPLY

Please enter your comment!
Please enter your name here