Binance hack: what happened and has it affected bitcoin prices?

Hackers have stolen around $42m (£32.3m) worth of bitcoin from one of the world’s biggest cryptocurrency exchanges.

Binance, which handles the buying and selling of virtual currencies, was attacked by cybercriminals who took 7,000 bitcoins in a daring online heist on Tuesday afternoon.

Company chief Changpeng Zhao, who goes by the nickname CZ, said in a statement that the hackers “had the patience to wait and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time”.

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“The transaction is structured in a way that passed our existing security checks,” he added. “Once executed, the withdrawal triggered various alarms in our system.”

The company has suspended withdrawals on the platform, possibly until next week, the BBC reports.

Zhao has also requested that other exchanges block bitcoins linked to the hack from being transferred to different online wallets or cryptocurrencies, rending the stolen virtual tokes “largely useless”, the broadcaster says.

Speaking on live video-streaming app Periscope, Zhao encouraged Binance users to change their user names and passwords as a further precautionary measure, TechCrunch reports.

What happened?

At 6:15pm UK time on Tuesday, hackers used “a variety of techniques” to steal both vast sums of bitcoin, along with login and two-factor authentication password details, said Zhao.

The methods used include phishing, where attackers spoof people or systems into handing over sensitive information, as well as viruses and other forms of cyberattacks, the Binance boss added.

According to Wired, the hackers were able to “compromise several high-net-worth accounts” that were storing bitcoin in one of the exchange’s “hot wallets”, an online cryptocurrency storage system.

Although $42m worth of cryptocurrency is a substantial figure, it accounts for only 2% of the company’s holdings in bitcoin, the tech news site adds. Binance has promised to compensate the owners of the stolen digital coins by tapping into its Secure Asset Fund for Users (SAFU), which is essentially an emergency reserve.

Have bitcoin prices been affected?

Despite the scale of the hack, bitcoin prices have actually increased since Tuesday.

Cryptocurrency ranking site CoinMarketCap puts bitcoin values at $6,085 (£4,680) as of 9am UK time on Wednesday, up from Tuesday’s high of $5,971 (£4,595).