Binance, that says it is the world’s largest crypto-currency exchange by trading volume, on Wednesday suspended all its trading services after saying it had discovered “odd trading behavior.”
On Tuesday evening, US-time, Binance announced all “trading, withdrawals and other account functions will be suspended.” The exchange reopened again about seven hours later. Initially the exchange said the suspension was for “systems maintenance,” but later confirmed it was a “precautionary security measure” caused by “irregular trading” patterns.
These appears to be due to a successful hacking attack on a token that trades on the Binance exchange. The Syscoin token swung dramatically upward in price last night, from 0.00004 Bitcoin to 96 Bitcoin. After Syscoin saw the irregular patterns, it asked crypto exchanges to suspend all trade on its token.
“We saw massive bot activity,” co-founder Sebastien DiMichele told industry news site Coindesk, referring to a software “robot” application that runs automated scripts. “Our community [then] let us know that they were having trouble with deposits at Binance.”
Although the actual nature of the hack currently remains unclear – with the crypto industry now speculating that hackers had started mining their own Syscoin tokens – it does seem that the Binance platform was compromised.
Binance only started trading in 2017 and has constantly been in the news ever since. Founded by 41-year-old Changpeng Zhao – who was born in China’s eastern Jiangsu province but educated in Vancouver – Binance soon claimed, within months of starting operations, to be handling more than three billion orders a day, processing daily trade volumes worth more than $1.5 billion and clearing $200 million in profits every quarter. Zhao, or “CZ” as he is known in the crypto world, said these numbers made Binance “more profitable than Deutsche Bank.”
In March, after facing increased regulatory pressure in its Asian HQs – first in Shanghai, next in Hong Kong and then in Tokyo – and after also facing questions, along with many other Asia exchanges, about the fabrication of trading volumes, Binance suddenly announced it was going to move its operations to the tiny Mediterranean island of Malta.
Now this latest news from Binance brings more bad news to an already pressured crypto industry.
Binance’s suspension announcement saw the Bitcoin price fall by approximately 2.5% in overnight US trading. After weeks of near-constant declines the markets had been rallying this week, with Bitcoin rising in the last few days from below $6,000 to above $6,500. Now analysts are watching for further market falls prompted by jittery Binance customers rushing to make withdraws.
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