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Binance Experiences Targeted Hack: Temporarily Suspends Transactions

31 Oct, 20226 min readOther
Binance Experiences Targeted Hack: Temporarily Suspends Transactions

The largest cryptocurrency exchange in the world experienced a targeted hack, to the surprise of millions of people who put their faith in this platform. Unfortunately, even the most established and secure exchanges can fall victim to cybercrime; that’s why education on this matter is absolutely essential these days. Let’s see what happened, the measures taken to address the issue, and what steps you can take to stay protected online.

A total of $570m was taken

Hackers managed to drain 2 million BNB tokens – approximately $570 million from Binance’s BNB Chain, a devastatingly vast amount of money. The company declared that hackers targeted a cross-chain bridge connected to its BND Chain. These cross-chain bridges are tools that enable users to transfer assets from one blockchain to another. Hence, the giant exchange company suspended all transactions and fund transfers while professionals were working on the matter.

Binance said in a blog post that a bug in the bridge’s smart contract resulted in this all-time hack. This enabled malicious actors to set up transactions and send money back to their electronic wallets. Since smart contracts imply code pieces on the blockchain that let agreements be carried out automatically, hence without someone’s intervention, this made it possible for hackers to access a considerable amount of tokens. An exploit on BSC Token Hub, a cross-chain bridge, led to extra BNB moving through the bridge and further opened doors of opportunities for hackers. According to Binance, cybercriminals stole a total of 2 million BNB – about $570 million. But thanks to experts’ diligent efforts to make things right, almost all funds are now under control.

Binance temporarily suspended transactions

Binance immediately noticed the hack and took measures to stop it from spreading. Its first approach was, of course, to suspend all activity on the network. A company’s spokesman declared for CNBC that Binance agreed with several BNB Chain validators to put this to an end and enact an upgrade. BNB Chain has 44 validators in various time zones, and 26 are currently active.

Binance is just the latest cryptocurrency exchange victim of a targeted hack. And just because it’s an established, trustworthy platform with innovative safety habits in place doesn’t mean it can’t be compromised. With the present technological advancements, it’s possible to strengthen a platform’s security, but so it is to hack it. The thing is that cybercriminals make use of these technological innovations for bad purposes.

The matter is “contained”

The CEO of Binance, Changpeng Zhao (CZ), said in a tweet that “the issue is contained now” and apologized for this inconvenience. He also assured users that their funds were safe and sound and that he would inform them about further updates. Binance probably never expected a cyberattack of this kind, so it was a shock even for the team to be put in such an unfortunate situation. Temporarily suspending transactions and the transfer of funds was Binance’s first approach, as previously mentioned, as the cryptocurrency industry is prone to hacks whenever users move their digital goods from one blockchain to another. CZ also specifies this in an interview for CNBC.

An earlier update from Binance placed the total of $570m stolen in a range of $100m, minimizing the losses considerably. The company also said it froze about $7m of funds thanks to a team of security experts who handled the issue irreproachable.

BNB’s value dropped to $285.36 per coin, based on CoinMarketCap information, but it’s only expected to be so. A hack of this magnitude has devastated not only the world’s largest crypto exchange but also impacted customer trust. Although Binance resumed its activities, what’s next for it only remains to be seen. We can only hope for improved security protocols and regulations.

Education on cybersecurity is essential now more than ever

If Binance, the biggest crypto exchange in the world, “managed” to be compromised, what to say about other platforms or an average individual’s crypto wallet? That’s why taking cybersecurity seriously and protecting your cryptocurrency is mandatory. Here are some of the most effective habits you can adopt to keep your digital assets safe from hackers.

How to stay safe

Avoid public Wi-Fi

When navigating your crypto exchange or wallet, you’ll ideally not use public Wi-Fi. This negligent habit provides cybercriminals passage to your most valuable goods and access to your location and IP address. That’s why we encourage using a VPN (a virtual private network) whenever possible to hide all these personal data and create an encrypted tunnel that would make it almost impossible for malicious individuals to hack you. You’re the only one in control of your private information and funds, and so should you remain! Take healthy cybersecurity habits seriously; otherwise, you’ll be more likely to get compromised.

Have a robust password in place and change it regularly

Guessing your password is a hacker’s first try to access your account and steal your funds. So, if you still rely on passwords like “name1234” or “favorite football team + some random numbers,” it’s time to change your habits. Consider instead building a complex, strong password that has nothing to do with your preferences, occupation, family, etc. When picking a password for your crypto wallet, it is recommended to use a combination of letters, numbers, characters, and, preferably, long phrases that are hard to decipher. Also, ensure you don’t use the same password for all your online accounts but rather diversify – and change them regularly.

Store your crypto in a cold wallet

Cryptocurrencies and any digital goods like NFTs can be stored either in a hot or cold wallet. The former is usually more viable, as it involves an Internet connection, but the latter is considered safer. That’s because a cold wallet is a hardware storage method, meaning that no one but you can access your private keys. These keys are kept safe and sound, usually on a USB drive stick, but there’re also other types of cold wallets, such as paper, typically – and ideally – stored in a safety deposit box or fireproof safe.

Binance has been hacked, but it seems the situation is under control. According to the company, users’ funds are safe, so – let’s hope so – we have nothing to worry about.

Disclaimer: This is a guest post. Coinpedia does not endorse or is responsible for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to the company.

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