Binance is currently the biggest cryptocurrency exchange in the world by volume. The exchange offers a wide variety of altcoins and has been appraised by the community as being the most professional and customer supportive exchange. However, last Wednesday uncertainty spread across the community as rumors of a potential Binance hack was brought forth. Some users had according to their balance sheets in their account, lost some if not all their funds. This caused Binance to instantly disable all deposits and withdrawals to stop any bad actors from withdrawing stolen funds from the exchange. Within an hour, the price of bitcoin fell 9.76% to $9692 as the cryptocurrency community feared an enormous amount of cryptocurrencies were stolen from the exchange. This was also the day the SEC warned of a potential crackdown of unregulated crypto exchanges.
Source: https://coinmarketcap.com/currencies/bitcoin
Changpeng Zhao, CEO of Binance did, however, tweet out the following while rumors were getting out of control.
https://twitter.com/cz_binance/status/971454040704872448
The hacking attempt was identified was executed through the use of API keys, which users can enable for their account if they wish to pull of the API of the exchange to build 3rd party applications. Hackers used stolen API keys to trade users’ funds for their own altcoin at an enormous price and then withdraw the money. But as Binance shut down withdrawals, the hackers got nothing and users had their funds returned.
https://twitter.com/cz_binance/status/971520303812698112
Because this theft attempt was of considerable size and was well planned (to some extent), Binance has decided to launch a bounty program, rewarding individuals who can provide information leading to the arrest of the hacker/hacker group. You can read all about this bounty in Binance’s official bounty medium post here.
Binance has also allocated 10 million dollars in cryptocurrencies for future hacker-bounties.
Furthermore, Binance has currently allocated the equivalent of $10,000,000 USD in crypto reserves for future bounty awards against any illegal hacking attempts on Binance.