The world’s largest cryptocurrency exchange company has fallen victim to a security breach, raising concerns about the safety of digital currency. As instances of online banking fraud continue to rise and the value of paper notes diminishes, many people have turned to digital currencies. But before you dive into the world of cryptocurrency or consider starting a blockchain-based business, it’s essential to understand the potential risks. Will digital currency become the currency of the future? Is it truly safe? These questions remain unanswered, but today, we aim to inform you about the recent hack that targeted the biggest cryptocurrency exchange company and provide you with the details.
But first, let’s explore the concept of a cryptocurrency exchange. What exactly is a cryptocurrency exchange?
A cryptocurrency exchange, also known as a digital currency exchange (DCE), is a company that facilitates the conversion of cryptocurrencies or digital currencies into other assets. These assets can be traditional fiat currencies or other digital currencies. Exchanges enable transactions through various payment methods, such as credit card payments, wire transfers, or alternative forms of payment, in exchange for cryptocurrencies.
Binance: The Target of the Hack
Binance, the most renowned cryptocurrency exchange globally, has recently suffered a significant security breach. With the largest daily trading volume of cryptocurrencies, Binance has been at the forefront of the industry since its establishment in 2017. The company is registered in the Cayman Islands.
How did the Binance hack occur?
The news of Binance’s hacking has sent shockwaves through the cryptocurrency world. The estimated potential loss resulting from the breach amounts to around half a billion dollars. The hack involved a temporary suspension of trading and fund transfers on the platform.
Upon discovering an exploit between two blockchains, Binance promptly halted trading and fund transfers. This method of digital theft has been observed in other major hacking incidents as well.
“The issue has been resolved. Your funds are safe. We apologize for the inconvenience and will provide further updates accordingly,” said Changpeng Zhao, CEO of Binance, in a tweet.
Binance has stated that approximately $100 million of the funds could not be recovered yet. The total amount taken in the attack was $570 million.
In a blog post on Friday, the Binance Chain, which includes the trading of BNB Chain, expressed their efforts to mitigate the potential losses.
“Firstly, we would like to ask for your understanding and forgiveness for this exploit. We take full responsibility for this incident. While no system is foolproof against such exploits on centralized chains, we were able to prevent the spread by contacting each of the validators in the community,” wrote the Binance Chain.
The BNB Chain added, “We are grateful to the security experts, practitioners, and validators whose contributions have helped us regain control of the majority of the funds.”
Last year, Binance called for global regulators to establish rules and regulations for cryptocurrency markets. The company emphasized the responsibility of crypto platforms to protect users and prevent financial crimes. They emphasized the need to collaborate with regulators and policy-making bodies to establish standards ensuring user safety.
Binance is not the sole cryptocurrency company that has faced targeted hacking. In August, Nomad, a company enabling users to transfer crypto tokens across different blockchains, also fell victim to a security breach, resulting in the theft of around $200 million, as reported by the media. Similarly, Harmony, another transfer service, experienced a hack in June, leading to a loss of nearly $100 million.