By
Chimamanda U. Martha
April 19th, 2024
Currently, all withdrawal and deposit actions are marked as ‘Suspend’ and cannot be carried out on Binance.
The world’s leading crypto exchange Binance, that has recently suffered a hack and lost 7000 Bitcoins (about $40 million), will get back to its activity and start to resume deposits and withdrawal services tomorrow. According to the exchange’s blog post, to make the process of recovery faster, Binance has been updated with a large number of advanced security features.
Binance Hack: History
On May 7, Binance lost 7000 Bitcoin tokens from its platforms worth $40 million. As the company stated at that time, hackers had managed to get access to users’ API keys and two-factor authentication codes, but the hack only affected the exchange’s hot wallets that contained not more than 2% of the exchange’s entire Bitcoin holdings.
Binance reacted immediately and suspended withdrawals and deposits, still allowing trading. The exchange’s CEO promised to reimburse all the loss to the customers who had suffered in the incident, and for that, they would use the Secure Asset Fund for Users (SAFU fund). The fund which comprises 10 percent of all the trading fee earned by the exchange, is a back-up option to protect Binance users in extreme cases just like this one.
As we reported, Binance was also going to take measures to protect users from such a risk in the future. The company promised to make changes to the application programming interface (API), two-factor authentication (2FA) and withdrawal validation areas, as well as enhance its risk management, user behavior analysis, as well as KYC procedures.
A couple of days after the hack, Binance CEO Changpeng Zhao published an update saying that the company was doing really hard to make progress on handling the problem.
He wrote:
“We are making significant changes to the API, 2FA, and withdrawal validation areas, which was an area exploited by hackers during this incident. We are improving our risk management, user behavior analysis, and KYC procedures. We are working on more innovative ways to fight phishing. We also have a number of additional security measures being implemented not directly visible on the front end.”
Changpeng Zhao added:
“We will be adding hardware device support, such as YubiKey and other devices, very soon. We will run an event and give away 1,000 YubiKeys as soon as that feature is implemented.”
Moreover, Binance engaged a lot of security and blockchain analytics firms to help the company track the stolen funds and collaborated with many exchanges and other service providers to freeze the stolen funds.
Further Measures
In the latest update, Changpeng Zhao announced that the crypto exchange plans to resume deposits and withdrawal services on May 14. He said:
“We aim to fully resume deposits and withdrawals on Tuesday. The time will be communicated at a later stage, depending on how the testing goes. This upgrade will require a trading halt. We will update you again tomorrow.”
Currently, all withdrawal and deposit actions are marked as ‘Suspend’ and cannot be carried out on the exchange.
Binance CEO stated:
“Our team is making progress and has been working through the weekend. In the past few days, we have made some significant overhauls to our system, with a large number of advanced security features added and/or completely re-architected. We will share details on some of the changes later.”
It is notable that the Binance team is not depressed and ready to continue fighting with the consequences of the hack. With advanced security features, it is expected that such a case will never take place again.