One of the biggest criticisms that cryptocurrency markets tend to face is that of the fact that much of what happens to the cryptocurrency prices can be affected by the most random of things. Rumours and speculations have a big part to play in the markets. The latest example of a rumour affecting the markets is that of Binance being hacked.
Rumours of a Binance hack have been floating around the markets since yesterday, causing a major panic and furore in the markets. This led to a number of people withdrawing funds from the exchange or simply selling it off. Bitcoin price crashed by about 10% over the past 24 hours due to these speculations.
These rumors of a Binance hack started off when a number of users noted that their accounts had unauthorized buy/sell orders. These orders were automatically being placed for Viacoin - a lesser known altcoin which jumped up by 400%. Users were reporting that first all their altcoin holdings were sold off and that was followed by their Bitcoin holdings. A look at the Binance exchange data shows that a ~325,000 VIA buy order placed shortly before 3 pm UTC.
Most of the affected users stated that they had checked their login history for any unauthorized access but found no such intrusions. Moreover, most of these users also had the 2 Factor Authentication system in place which acts as an additional security measure. Following these strange transactions taking place, Binance announced that they are freezing all withdrawals.
A further investigation from Binance revealed that all of the victims the exchange has identified had registered API keys, which are commonly used in trading bots. Binance claimed that there was no evidence that the exchange had been compromised. Changpeng Zhao, the CEO of Binance stated that all funds are safe. Zhao, in a Tweet, stated: All funds are safe. There were irregularities in trading activity, automatic alarms triggered. Some accounts may have been compromised by phishing from before. We are still investigating. All funds are safe.
Over the past 24 hours, as the rumors of Binance hack became mainstream, it resulted in a widespread panic - which was one of the biggest reasons for Bitcoin prices crashing by 10%, falling below $10,000 for the first time in 10 days.
In another update following this incident, the CEO of Binance has now stated that the exchange has reversed all transactions. Zhao said in a Tweet: Binance has reversed all irregular trades. All deposit, trading and withdrawal are resumed. will write a more detailed account of what happened shortly. Interestingly, the hackers lost coins during this attempt. We will donate this to Binance Charity.
This isn’t the first time that Binance hack rumors have caused cryptocurrency prices to tumble. Earlier this year, Binance went down for over 12 hours as they faced a DDoS attack and were under maintenance, recovering their backups. Rumors about Binance being hacked were rampant at that time too. However, similar to the recent incident, that one too was just a rumour!