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Binance Users Report Abnormal Altcoin Trading Activity on Platform

2 mins
Updated by Paolo Besabella
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In Brief

  • Binance users have reported several abnormal altcoin tradings on the platform.
  • The exchange said the trades do not appear to be from a compromised API key.
  • CZ added that the exchange temporarily locked withdrawals on accounts profiting from the contra trades.
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Binance users have reported abnormal trades of some altcoins, including OM, NEXO, AMP, POLS, SUN, ARDR, BIFI, XVS, ARK, LOOM, and OSMO, Wu Blockchain reported

According to the report, the abnormal trades triggered concerns about whether hackers have stolen some users’ API keys through 3Commas and are now using those accounts to execute the trades.

Binance Altcoin Trading
Source: Wu Blockchain

Binance Denies API Compromise

However, Binance has denied that there was any hack or API compromise. The official account tweeted, “This activity does not appear to be due to compromised accounts or stolen API keys; funds are SAFU.”

The CEO, Changpeng Zhao, has added new information stating that investigations so far showed that one account deposited funds and started buying and other accounts also started doing the same. Investigations do not show any relationship between the accounts.

He added that Binance temporarily locked withdrawals on some accounts profiting from the contra trades. This triggered several complaints from various addresses on social media.

CZ said:

“We are aware of the concept of too much intervention from the platform, “too centralized” attacks, etc. There is a balance to how much we should intervene. Sometimes, these happen in a free market, and we need to let it play out.”

Meanwhile, 3Commas also noted that it is working with Binance to investigate the incidents and determine whether it is connected to the API compromise.  

Even with the clarification from Binance, many people are still concerned that this might have something to do with compromised users’ API keys.

Similar Event on FTX

In October, several FTX users reported that contra-trade on their accounts led to the loss of their assets. A particular user lost almost $1.6 million of his assets through a contra trade involving DMG tokens.

Initially, 3Commas denied that there was no leak on its part. But it later found out that several phishing websites imitated the 3Commas design and interface. These phishing sites captured all the API keys of users who unknowingly used them.

Hackers later used the API keys to access users’ accounts and place unauthorized trades. At the time, the trading platform urged users to create new API keys and update their linked exchange accounts.

With a similar situation now happening on Binance, there are concerns that 3Commas and the exchange are not giving complete information.

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Oluwapelumi Adejumo
Oluwapelumi believes Bitcoin and blockchain technology have the potential to change the world for the better. He is an avid reader and began writing about crypto in 2020.