The Jittery cryptocurrency market recently started to show the signs of bull run, however, in between, the cautiousness has captured the minds of people and all are again witnessing the speculations that started over the upcoming trend of Bitcoin (BTC) and market sentiments throughout the industry due to the recent security breach suffered by Binance.
Binance, one of the most trusted cryptocurrency exchanges has become a matter of concerns for the cryptocurrency community due to the recent hack of 7,074.1925031 Bitcoins (BTC) which is approx. $41million as per the current price of BTC at the time of writing andmaking it the 6th largest hack in the cryptocurrency history.
On May 7, 2019, early morning, soon after the announcement by — CZ Binance (@cz_binance)
Have to perform some unscheduled server maintenance that will impact deposits and withdrawals for a couple of hours. No need to FUD. Funds are #safu.
The exchange had to undergo “unexpected server maintenance” that would temporarily impact deposits and withdrawals. Changpeng “CZ” Zhao transparently informed the customers using the Twitter account. Later day around 15:15 pm local time it got publicized that the exchange suffered a “large scale security breach”.
The news has increased the level anxiety among the users and the flood of tweets on social media platform Twitter hasn’t been stopped which shows the apprehensive comments in regards with the further steps and retrieval of funds by one of the largest cryptocurrency exchanges in trading volume.
Users Important Data Stolen, Says Binance Blog
According to the Binance blog,it also came to notice that apart from the huge amount of loss, the hackers additionally took potential information of users among others are large number of user API keys, 2FA codes by deploying crafty methods and a variety of techniques, including phishing, viruses, and other attacks which passed the existing security checks of the well-established company that earlier claimed itself as one of the most trusted boutiques of keeping and transacting cryptocurrencies worldwide for extensive variety of altcoins.
As per the information in this one transaction: https://www.blockchain.com/btc/tx/e8b406091959700dbffcff30a60b190133721e5c39e89bb5fe23c5a554ab05eathe hackers were able to patiently execute their actions by a well-orchestrated plan and withdrawn 7000 BTC.
Further, it is cleared that the all other wallets of the company are unharmed and secured and the aforementioned transaction is the only affected transaction. All the other transactions are safe because once this transaction completed, the alarms quickly triggered and all other withdrawals were subsequently stopped and got safe.
As of now, only BTC hot wallet of Binance got impacted. The wallet which kept about 2% of the exchange’s total BTC holdings”.
Ironically, whether it is 2% of the exchange holdings or any other less percentage, the truth is users trust got a set-back subsequently.
No user funds affected, Binance has SAFU
Although, CZ by reassuring and comforting the customers relayed that no user funds would have an impact and Binance has the secure asset fund for users #SAFU fund (https://www.binance.vision/glossary/secure-asset-fund-for-users) to cover this incident in full.
Who are the Hackers?
There is a big question in everybody’s mind about the identity of the hackers. People are saying possibly it is the old group of hackers named “Alpha” and “Beta”. The group earlier stole approx $1billion of funds and whipped out 60% of users digital assets from all the publicly listed crypto exchanges. Alpha is a major and notorious name in hacking. This is a strong organization partly driven by non-monetary goals. Beta is a less organized and small organization extremely focused on money. Few commentators also of the opinion that it could be the same North Korean state-sponsored infamous Lazarus group which came into the notice during March this year for their new adoption methods which they are deploying in the process of continuously targeting cryptocurrency businesses.
What Analysts have to Say? Binance Lack Segwit implementation
Larry Cermak, Diar’s former researcher and the present head of The Block is of the view that Binance lack Segwit implementation despite the low fee advantage- a name used in the crypto industry to implement the soft fork change in the transaction format of Bitcoin(BTC). She also thinks that due to the lack of this function cryptocurrency exchanges are not able to safeguard from being triggered by the security breach.
Reportedly, only Segwit implementation is used by only 36% of all Bitcoin (BTC) transactions by the crypto businesses. In early January 2019, through a Reddit Q&A forum co-founders of Gemini digital currency exchange and custodians, Cameron and Tyler Winklevoss, indicated that retrofitting exchange wallets for SegWit as a component suggested a “very tricky” technique requiring building “a new hot wallet from the ground up.”
The same month, Aaron Lasher, bitcoin wallet company-BRD’s chief strategy officer also expressed his opinion on Segwit implementation and reportedly said that it is an engineering level decision and changing the backend code to recognize bitcoin blockchain for sending and receiving transaction on SegWit transactions is not easy. Probably the adoption of Segwit would increase with more user adoption of Bitcoin (BTC) in the upcoming years.
CoinMarketCap data shows that Bitcoin (BTC) is trading at $6,074.10 with an adjusted volume (24) of $15,473,081,120 and a circulating supply of 17,690,100 BTC. The gain of 3.65% displays that the market is still not get affected. However, users are keeping their fingers crossed for the upcoming change which would probably come due to long-awaited bull run while safeguarding their digital assets in the trusted cryptocurrency exchanges, custodians, and wallets.