Binance Hacking May Greatly Affect Global Crypto Market, Observers Say

The Binance hacking is the most recent attack in the crypto market. Multiple sources have confirmed this news but details regarding the heist are still unclear.

Binance’s system was recently compromised with the source of the vulnerability attributed to the Syscoin token, according to Brave New Coin. The company, which is currently the number one crypto exchange by trading volume in the world, announced an emergency system maintenance following the attack.

Concrete information regarding the incident remains undisclosed. What is known so far is that the hackers managed to exploit Syscoin’s token production using what’s known as a buffer overflow vulnerability, although this isn’t a certainty at this point.

“Breaking the monetary supply rules for a cryptocurrency can’t be accomplished via a 51 percent attack; this indicates that a flaw has been found and exploited at the protocol level,” said blockchain developer Jameson Lopp. “It’s likely similar to the buffer overflow vulnerability that was exploited in Bitcoin in 2010 that allowed someone to create 184 billion BTC.”

Apparently, the hackers were able to mine a billion coins on a single Syscoin block, as indicated by the Syscoin block explorer. This vulnerability has been thought to be improbable since the cryptocurrency’s total potential supply was limited to 888 million.

Because of this large amount of Syscoin getting mined, the value of the cryptocurrency took an upswing of 85 percent before trading was halted. The hackers used this inflated number to trade 96 Bitcoins for a single Syscoin. And because the hackers mined a large number of coins, the anomalous transactions conducted during the Binance hacking were finalized as the blockchain couldn’t be rolled back.

Moreover, experts are saying that Binance’s Application Programming Interface (API) has also been compromised. While a confirmation has yet to be announced, the exchange tweeted that it is conducting a security update to its API following the attack, which strongly indicates that this may be the case. A theory proposed by Hacker News user “Snissn” sheds some light on this unknown way of system breach.

“Binance lets users trade in two ways: through their web and mobile apps and through an Application Programming Interface (API) that lets developers write software to write trades. This API uses access credentials called keys that authenticate the different traders,” Snissn posits. “The leading theory/rumor on what happened earlier today is that someone in an unknown way managed to hijack a significant number of API keys, or otherwise compromise the API server to impersonate a large number of users.”

Again, details are muddled on whether the Syscoin vulnerability and the Binance API breach were used together to accomplish the heist. Following this Binance hacking, it is likely that the crypto market will take a dive as the exchange’s users will likely withdraw their funds due to safety concerns..