7,000 Bitcoin, currently valued at some $42 million, were stolen in what is being called one of the most high-profile and largest hacks in recent times. The ‘online heist’ was made possible thanks to a large-scale security breach at the heart of Malta-based crypto giant Binance.

“Hackers were able to obtain a large number of user API keys, 2FA codes and potentially other info,” the global cryptocurrency exchange reported in a blog entry earlier today. “The hackers used a variety of techniques, including phishing, viruses and other attacks. We are still concluding all possible methods used. There may also be additional affected accounts that have not been identified yet.”

It is believed the hackers were able to withdraw the entire amount of 7,000 BTC in one fell swoop as a single transaction

“Not the best of days,” Binance CEO Changpeng Zhao tweeted out on Tuesday afternoon, moments after the security breach was initially discovered. “But we will stay transparent.”

“The hackers had the patience to wait and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time,” Binance’s blog post elaborated. “The transaction is structured in a way that passed our existing security checks. It was unfortunate that we were not able to block this withdrawal before it was executed. Once executed, the withdrawal triggered various alarms in our system. We stopped all withdrawals immediately after that.”

A “thorough security review” aimed at all of Binance’s systems and data is estimated to take about a week, with the crypto giant saying “all deposits and withdrawals will need to remain suspended during this period of time”

“We will continue to enable trading, so that you may adjust your positions if you wish,” Binance continued. “Please also understand that the hackers may still control certain user accounts and may use those to influence prices in the meantime. We will monitor the situation closely. But we believe with withdrawals disabled, there isn’t much incentive for hackers to influence markets.”

Binance plan on using the Secure Asset Fund for Users (SAFU), an emergency insurance fund announced back in July 2018, to cover this incident in full, promising that “no user funds will be affected.

Lovin Malta reached out to a local cyber security expert to delve into the implications of a breach this significant

“Crypto exchanges getting hacked is always a question of when, not if,” Jean-Michel Azzopardi, CEO of blockchain cyber security firm Kralanx explained. “The key differentiator with any hack is how long it takes to detect and respond.”

“Hacks aren’t instant, often an attacker embarks on a campaign which lasts months before releasing a payload,” Azzopardi continued. “Once the hack does occur, companies are usually slow to realise and react.”

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David Grech Urpani

Lovin Malta's Head of Content, Dave has been in journalism for the better half of the last decade. Prefers Instagram, but has been known to doomscroll on TikTok. Loves chicken, women's clothes and Kanye West (most of the time).