[Binance exploit] Bitcoin price drops 10% as hackers exploit Binance’s API keys

Welcome to another rollercoaster day for the cryptocurrency community. In just a few minutes, bitcoin price crashed from $10,740 to $9,690, which represents a 10.8 percent crash.

As always, it’s a bit hard to know for sure what’s happening. But one company in particular is having a bad day. Cryptocurrency exchange Binance has spotted some unusual activities and halted withdrawals.

Binance is one of the biggest exchanges out there. According to CoinMarketCap, it’s one of the 4 biggest exchanges for the top cryptocurrencies when it comes to traded volume.

Many people noticed something highly unusual with Viacoin happening right before the crash. There was a huge increase in buy orders for Viacoins on Binance. In just a few minutes, Viacoin’s market capitalization jumped from $64 million to $159 million

Binance looked into it and noticed unauthorized sell orders. “We are investigating reports of some users having issues with their funds. Our team is aware and investigating the issue as we speak,” the company wrote on Reddit. “As of this moment, the only confirmed victims have registered API keys (to use with trading bots or otherwise). There is no evidence of the Binance platform being compromised.”

So it seems like a third-party service or app got compromised. Users of that third-party app were relying on API keys to control Binance accounts. A hacker may have developed a bot that submits orders at the same time (7:00 AM Pacific).

While the Binance team halted withdrawals, it might be too late. It’s also possible that the hacker already had a big position in Viacoin on another exchange. The hacker could have sold a big pile of Viacoins shortly after manipulating the price on Binance.

In all cases, it proves once again that security is a big issue when it comes to cryptocurrencies. Don’t store your coins on an exchange. Use a hardware wallet or a wallet that lets you control the private keys.

Source/Credit: https://techcrunch.com/2018/03/07/bitcoin-price-drops-10-as-hackers-exploit-binances-api-keys/

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@wpbeginner | crypto-pro