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Home / Tech / Binance hackers shift stolen bitcoin, identity still unclear, say researchers

Binance hackers shift stolen bitcoin, identity still unclear, say researchers

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.

tech Updated: May 10, 2019 11:07 IST
Reuters
Reuters
London
A collection of Bitcoin (virtual currency) tokens are displayed in this picture illustration taken December 8, 2017. REUTERS/Benoit Tessier/Illustration/Files
A collection of Bitcoin (virtual currency) tokens are displayed in this picture illustration taken December 8, 2017. REUTERS/Benoit Tessier/Illustration/Files(REUTERS)

Hackers who stole bitcoin worth over $40 million from the major Binance cryptocurrency 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 cryptocurrency 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 cryptocurrency 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 percent of the level for all of 2018.

Although the movement of cryptocurrencies 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 cryptocurrency exchange, which usually require details of account holders’ identities. But such checks are, in reality, far from watertight, said Pawel Alexsander, Coinfirm’s chief information officer.

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“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 cryptocurrency 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.

Cryptocurrency markets have largely shrugged off the Binance hack, with bitcoin last up 1 percent 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 cryptocurrency sector and traditional finance, from wallet providers to exchanges, as well as one of Japan’s three megabanks.