Binance Hack

Crypto Hackers Lose Money in Failed Attack

Mar 10, 2018, 5:33PM
1 min, 18 sec READ

Hackers trick Binance users with phishing techniques but end up losing their own money; the risk management system prevented the withdrawals

Binance, one of the world’s largest cryptocurrency exchanges, was this Wednesday the target of a failed cryptocurrency hack that remarkably resulted in the attackers losing their own funds while customer accounts remained intact. The hackers used sophisticated phishing techniques to gather account information and attempted to funnel stolen funds through an illiquid asset called Viacoin.

How the Attack was Orchestrated

The hackers obtained user credentials by tricking Binance traders through fake sites that were designed to look like the real Binance website. They then used the credentials to create API keys and built software that could interact with the real exchange. After this, they used the keys to place massive buy orders on Viacoin that resulted in a 143% rally from $2.80 to $6.79 in only 30 minutes.

The plan was to sell their preloaded Viacoin holdings in exchange for Bitcoin and quickly cash out. However, Binance has an automatic risk management system that kicked in and prevented the transactions. The hackers were unable to withdraw any of the funds and their accounts have been frozen.

Outlook for the Industry

Cryptocurrency hacks have been a big topic lately, especially with the high-profile hack of Coincheck last month in Japan. These issues have led to tightening regulation on the industry and discomfort for everyone involved. The attempted hack on Binance may be a contributing factor in the continuing market sell-off in Bitcoin and other cryptocurrencies.

 

Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.