The subreddit r/BinanceExhange went nuts yesterday with a bunch of posts talking about massive sell orders without authorization. All posts shared complaints about alts being sold and then Viacoins being bought. One of them wondered if that had happened for a binance bot issue or an account hack.
While some coin owners were still crying out, Viacoin´s price rose on Binance platform. Some users realized that bots started to sell their altcoins and then quickly acquire Viacoins, all without their consent. Inevitably, phishing theories started to pop up. Such theories affirmed that hackers intended to elevate the price of Viacoins for their own benefit.
With the event still going on, Binance staff addressed some initial comments to their users. First, they acknowledged the situation. Then they assured that a full investigation was already in progress. They also affirmed that all the users who were affected shared in common that they had registered API keys and linked them with trading bots or similar kinds of stuff. As a consequence, Binance announced they blocked all withdrawals but kept allowing deposits and trading.
By the end of the day, Binance had the situation under control. It released a new post offering details of what had happened. As some users suspected, it was confirmed that the situation was a phishing attempt. However, Binance also guaranteed that user´s funds were in place and nothing had been stolen.
Hacker´s phishing strategy
Binance revealed that hacker´s strategy consisted of gathering user accounts since January 2018. They used a similar domain name to catch user accounts. Then created API trading bots for each one. They patiently waited until they found their opportunity yesterday. Finally, they made a 2 minutes move which was enough to puff up the price of Viacoins.
During that time hackers place a huge amount of new market buys on the VIA/BTC market and the price went to the sky. Meanwhile, there were 31 accounts selling Viacoins actively selling them and making huge profits. Soon after, withdrawal requests from these accounts started to appear.
Fortunately, Binance acted fast enough to detect and stop the withdrawals. Unusual trading patterns set off the alarms in that direction. Sadly for the hackers, they couldn´t collect their profits on time as Binance block them the access to their accounts. The new beneficiaries will be charity organizations. Binance announced they will donate the coins to them.
A valuable advice
After solving the situation, Binance said it will not able to reverse any BTC/VIA trade from phished accounts. It is because the trades were not executed against hackers´ accounts. The company said it didn´t have the power to reverse such operations.
Despite thy can´t reverse all the situation, Binance proved they can handle risky security measures and win. Their security protocols were functioning very well and it allowed them to detect the situation on time. Staff members also demonstrated to be talented and efficient. In the future, other exchanges should take this case as a successful example of what to defeat hackers. Users should also learn their lesson and start taking strict measures to protect their account credentials. The war between hackers and exchanges will continue and these are the type of actions that must be emulated.