Here’s What Really Happened With Binance on Dec. 11

article image

Arman Shirinyan

Sudden spike in trading volume on numerous assets was not natural, but users should not panic

A strange and sudden volume spike on numerous altcoins across the trading platform was not something the majority of investors would expect during a weekend trading session. Unfortunately, the source of the provided volume was not natural.

Back in November, numerous users reported a problem: they noticed an occurrence of orders they had not placed on the platform. Someone or something was causing a spike in trading volume on various assets, including AXS, which was not targeted in this case.

Later on, Binance CEO CZ confirmed that the issues were not on the exchange’s side. The problem was tied to a trading API key leakage. Technically, Binance was simply following orders from users and did not have any issues with its inner systems.

In this case, Binance remains intact, with its core system working normally and without facing any issues. Presumably, the problem is tied to yet another API key leak. According to WuBlockchain, the keys were stolen by hackers, and the issue is related to 3Commas trading bots.

The official Binance account or Changpeng Zhao himself have neither confirmed nor refuted the users’ claim. However, the source of the leak might not be tied to any kind of security breach. Sometimes, users are unable to properly store their API keys, or they provide them to third parties that do not contain them correctly.

3Commas has confirmed the issues reported by hundreds of users and stated that old keys that have not been used for more than three months will be revoked. The management team of the platform believes phishing was the case.

3Commas has also confirmed that there were no security or encryption mechanism breaches, to the best of their knowledge.