In yet another harsh critique of cryptocurrency exchanges and their security, major trading hub Binance recently found itself under a potential hacker attack. Although details are sketchy, Binance was forced to halt withdrawals after detecting some unusual activity on its platform.
The suspect transfers involved a massive jump in buy orders for Viacoin, which saw the altcoin’s market capitalization go from $64 million to $159 million in just a few minutes. Binance later confirmed that there were unauthorized sell orders and said that users of trading bots have been compromised.
Tech Crunch’s Romain Dillet speculates that a hacker may have developed a bot to issue sell orders en masse by controlling third-party apps used by traders on Binance. Dillet suspects that Binance’s trading halt came too late, as the hacker would have had enough time to sell a large amount of Viacoin to manipulate its price.
Although it can be difficult to confirm the reasons behind Bitcoin’s price movements, Dillet thinks that the security issue on Binance caused the cryptocurrency to lose 10.8% within minutes, going from $10,740 to $9,690.
The attack comes as a shock since Binance is one of the four biggest crypto exchanges by traded volume. However, this is not the first time we have seen one of the biggest exchanges under attack. The Bitfinex hack on the BitGo wallet and the Mt. Gox hack are other examples of exchange security being put into question.
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