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tradeandholder

Binance announced SAFU

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Binance (the leading crypto exchange), recently announced the creation of "Secure asset fund for users (SAFU)" a  user safety fund in the aftermath of trading irregularities that saw at least one user purchase one syscoin for the equivalent of $625,000 (1 SYS = $0.26) in Bitcoin. Binance's lead technicians detected that this was caused by some of its API users, whose actions has triggered internal risk management system.

 

Once the system was triggered, the company decided to put a stop to withdrawals, trading as well as other functions, until an assessment of what was really happening has been carried out. Since the problem erupted from the API keys of users, these were removed and those utilizing them were told to recreate their keys. SYS trading pairs were affected by the incident. SYS as a cryptocurrency has over 90% of its trading volume concentrated on Binance, while the token is at press time trading at $0.26, the irregular trades that saw a user pay 96 BTC for one SYS.

 

In the announcement, Binance said that all irregular trades will be rolled back and they will be offering those affected negatively, a zero-fee trading between 5th and 14th of July to compensate them. A 70% rebate paid in BNB on trading fees will also be paid to all other Binance users. In a post, the exchange also said that, it is ready to create a SAFU:

Quote

Starting from 2018/07/14, we will allocate 10% of all trading fees received into SAFU to offer protection to our users and their funds in extreme cases. This fund will be stored in a separate cold wallet.

 

Close to the end of its update, it noted that the protection of its users is highly valued, and that it is bound to face challenges due to the explosive growth it experienced. SYS pump was no coincidence, as bad actors through a 3rd party trading bot with access to API keys could have been trying to manipulate the market. By compromising the said bot, several attempts could have been utilized by bad actors in pumping SYS, and then sell their own tokens at an inflated price.

 

This type of attack means that both Binance and the SYS blockchain were not hacked, but a third party. We are yet to know if hackers managed to withdraw their funds, but we assume Binance somehow stopped them.

 

Security

Binance also told users not to create an API key if they don’t make use of them frequently, and to avoid any third-party service providers from having access to their keys. It further advised users to make use of its IP whitelist functionality in order to enhance security and to ensure they’re the only ones with access to their API keys.

 

This is not the first malicious attack for Binance. Earlier this year, hackers attempted to manipulate the price of Viacoin (VIA) in a similar way. In this attack, the hackers made use of phished accounts to pump the price of VIA, so they would be able to dump their own tokens and then withdraw in BTC.

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