Binance Breached for Its Bitcoin

Binance, the world’s biggest crypto exchange, announced this week that hackers made off with over $40 million in bitcoin. In a single transaction, the cyber thieves withdrew 7,000 bitcoins, equal to about 2% of Binance’s total bitcoin holdings.

How? They were patient, using a “well-orchestrated” attack that included phishing and viruses, Binance said.

What now? All losses will be completely covered by Binance’s Secure Asset Fund for Users—so no accounts will take a hit. Trading will continue, but deposits and withdrawals will be suspended for about a week.

The fallout

Responding to the hack, Binance CEO Changpeng Zhao (aka CZ) floated a rollback to rewrite a portion of the bitcoin network and invalidate the theft. That would’ve required at least 51% of all miners to band together and reverse the transaction, but CZ promptly dropped the idea after crypto Twitter didn’t take it well (to put it lightly).

Bottom line: Even for a trusted crypto brand, security is tough. Binance can stomach this one, but crypto theft could become a big threat to its bottom line.