On March 7th, Binance – the largest cryptocurrency exchange by trading volume – noted a new a vulnerability found within compromised API keys which resulted in some users noting unauthorized transactions.
Now, the exchange has posted a massive bounty of some $250,000 USD in Binance Coin (BNB) in exchange for any information on the hackers behind the incident that leads to a successful arrest.
In a press statement, the exchange quipped that:
“To ensure a safe crypto community, we can’t simply play defense. We need to actively prevent any instances of hacking before they occur, as well as follow through after-the-fact. Even though the hacking attempt against Binance on March 7th was not successful, it was clear it was a large-scale, organized effort. This needs to be addressed.”
The cryptocurrency exchange has further allocated some $10 million USD in cryptocurrency reserves that will stand as a bounty for any future hacking attempts on the service. The platform has encouraged other leading exchanges to follow suit, noting that “protecting your funds is and has always been our highest priority”.
In the wake of the hack, the exchange has subsequently confirmed that all irregular trades have been reversed and that deposits, trading, and withdrawals are once again fully operational. Community warnings have recommended that traders using third-party tools employing Binance API keys immediately disable either their accounts or reset their API key itself.
Bounties have grown in popularity across cryptocurrency services and regulatory bodies – in February this year, the US Commodity Futures Trading Commission (CFTC) announced a new bounty program that would offer figures of more than $100,000 USD to whistleblowers who expose cryptocurrency-based ‘pump and dump’ schemes.
It remains to be seen if the model will be readily adopted by other cryptocurrency exchanges and legislators in a bid to bring a level of order to wider trading and financial infrastructure.
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