By Bhushan Akolkar
Updated
3 min read
Some users complained regarding the compromise in API keys, however, Binance has denied it stating that the funds are SAFU.
One of the leading cryptocurrency exchanges Binance recently spotted some abnormal price movements on the platform. As a result, Binance locked withdrawals for some accounts.
Last Friday, December 9, the exchange closed a trader account after a user complained about the exchange’s response to alleged funds theft. Besides, the exchange also decided to temporarily freeze withdrawals from some profiting accounts. These developments led to an internal investigation after which Binance CEO Changpeng Zhao said that the movements were “just market behavior”.
Binance also acknowledged the abnormal price movements for certain trading pairs on the crypto exchange. These trading pairs involved Ardor, Sun Token, Osmosis, Golem, and FUNToken. It added:
“Our team is investigating and taking appropriate actions in regards to the suspicious accounts. This activity does not appear to be due to compromised accounts or stolen API keys; funds are SAFU”.
Binance chief Changpeng Zhao himself tweeted stating that this was just normal market behavior. He noted:
“Based on our investigations so far, this appears to be just market behavior. One guy deposited funds and started buying. (Hackers don’t deposit). Other guys followed. Can’t see linkage between the accounts”.
However, Binance’s decision to temporarily lock withdrawals for some profiting accounts led to a major uproar on social media. “We are aware of the concept of too much intervention from the platform, “too centralized” attacks, etc. There is a balance to how much we should intervene. Sometimes, these happen in free market, and we need to let it play out,” added CZ.
Although crypto exchange Binance has denied the possibility of API compromise some users have complained regarding the same. A user named CoinMamba started complaining about the loss of funds on December 8 claiming that a leaked API tied to crypto trading firm 3Commas was used “to make trades on low cap coins to push up the price to make profit.”
In a series of tweets, the user also claimed that Binance was unable to provide him with appropriate support. Responding to this a day later, Binance chief CZ wrote that “Mamba, there is almost no way for us to be sure users didn’t steal their own API keys. The trades were done using API keys you created. Otherwise, we will just be paying for users to lose their API keys. Hope you understand”.
However, 3Commas also denied any exploits on its protocols and databases adding that they had no responsibility for the stolen API keys. They noted: “On the basis of the information we have today, we have found that no encryption protocols have been found to be compromised and no breaches of 3Commas’ account security databases have occurred”.
At this point, Binance must know who is the 3commas API hacker. It's too easy. They should pause withdrawals from the accounts that sent offers high up right before the pump and investigate.
I'm sure the people in Binance understand what the hacker is doing (if not, I can help) pic.twitter.com/rOdmmfsAtq
— Bitbit.BTFD (@bitbitcrypto) December 10, 2022
Another user also raised the issue of an alleged API hacker. The user requested Binance to halt withdrawals and investigate the incident.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
