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Bitcoin Drops After Binance Hack

Investing.com - Major crypto exchange Binance suffered a “large-scale security breach” in which hackers stole over $40 million in cryptocurrency. The news weighed on the crypto market on Wednesday morning in Asia, causing major digital tokens to slide.

Bitcoin dropped 1.19% to $5,875 by 11:36 AM ET (03:36 GMT), reversing gains from the day before. The coin gained steam during the past few days to test $6,000 but momentum died out after the Binance hack news broke. With that said, the coin has yet to experience wild price swings.

Sharing the same bearish sentiment, Ethereum slid 5.62% to $169.54, XRP shed 1.67% to $0.30027, and Litecoin lost 4.83% to $74.031.

The total market cap went down to $183.9 billion from $189 billion the day before.

On Tuesday, Binance said hackers withdrew 7,000 Bitcoins worth around $40 million in one affected transaction. Its secure asset fund for users will cover user losses and no user funds will be affected.

Binance CEO Zhao Changpeng said the Bitcoins stolen from the hot wallet accounted for only 2% of the exchange’s total Bitcoin holdings and reassured that Binance’s other wallets are unharmed.

“Hackers were able to obtain a large number of user API keys, 2FA codes, and potentially other info. The hackers used a variety of techniques, including phishing, viruses and other attacks. We are still concluding all possible methods used. There may also be additional affected accounts that have not been identified yet,” Binance said in a statement.

The exchange added that it will conduct a thorough security review which will take about a week. It also noted that hackers may still control certain user accounts and may use those to influence prices in the meantime.

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