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Binance hackers shift stolen bitcoin, identity still unclear: researchers

Binance hackers shift stolen bitcoin, identity still unclear: researchers

Hackers stole around 7,000 bitcoin through phishing and viruses

Credit: Reuters

Hackers who stole bitcoin worth over $40 million from the major Binance crypto-currency exchange have moved the tainted coins to a number of digital wallets, researchers said on Thursday, potentially throwing up clues to those behind the heist.

Binance, one of the world's biggest exchanges, said on Wednesday that hackers had stolen around 7,000 bitcoin through phishing and viruses, the latest in a string of crypto-currency thefts to hit exchanges across the world.

According to London-based blockchain analytics company Coinfirm, the hackers have moved the stolen bitcoin through several digital wallets, with almost all the coins now sitting in seven digital addresses.

Theft remains a major problem for the emerging crypto-currency sector, with high profile hacks alarming regulators and raising questions for larger investors over whether digital coins can be safely stored and traded.

Losses of digital coins from hacks and fraud hit $1.2 billion between January and March, around 70 per cent of the level for all of 2018.

Although the movement of crypto-currencies can be traced, the identity and location of the hackers or owners of the wallets holding the stolen coins is unknown, Coinfirm said.

Still, the findings may offer clues to the identity of the hackers.

To convert bitcoin to traditional money, hackers would have to move the stolen coins to a crypto-currency exchange, which usually require details of account holders' identities. But such checks are, in reality, far from watertight, said Pawel Alexsander, Coinfirm's CIO.

Quick response

"Exchanges are obliged to have KYC (know-your-customer) processes in place. In practice, many of them do not do this properly," he said. "People can open fake accounts, and deposit the funds to that account."

Binance, which is based in Malta but has over 400 workers spread across more than 40 countries, was the highest profile exchange to be hit since hackers stole crypto-currency worth $530 million dollars from the Tokyo-based Coincheck in January 2018.

A Binance spokeswoman did not immediately respond to calls and messages seeking comment.

Crypto-currency markets have largely shrugged off the Binance hack, with bitcoin last up one per cent at around $6,000, its highest since mid-November.

Analysts and traders said that was down to Binance's relatively quick response to the hack. CEO Changpeng Zhao said in a website post on Wednesday that the company would use a fund to cover users' losses.

Coinfirm has 130 clients across the world in the crypto-currency sector and traditional finance, from wallet providers to exchanges, as well as one of Japan's three megabanks.

(Reporting by Tom Wilson, Editing by William Maclean)


Tags securityBinance

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