According to a memorandum, Binance Holdings Ltd. puts up a $1 billion insurance fund for its users.
Binance, the world’s largest cryptocurrency exchange by trading volume, puts money aside for an emergency fund since July 2018. However, only recently consolidated the funds into one place. Following a series of cyberattacks, including one at Binance in 2019, the initiative is an attempt to assuage user fears.
Hacks and Frauds in Crypto
Fraudulent withdrawals of about $34 million in bitcoin and cash hit Crypto.com clients’ accounts earlier this month. Hacked Qubit Finance’s blockchain extension last week and stole about $80 million in crypto.
Encryption has always struggled with network security. Many hackers may exploit the network’s security flaws to conduct unlawful activities, causing losses for exchange platform investors.
According to blockchain.news, at least 400 Crypto.com accounts hack on January 20, resulting in $34 million in bitcoin and cash removes fraudulently.
Crypto.com CEO Kris Marszalek told Bloomberg that at least 400 accounts were stolen. He also added that if the regulator had real issues, he would be happy to elaborate.
Consequences of the Hack
Due to suspected unlawful transactions on the platform, Crypto.com said it will suspend all deposits and withdrawals at the time.
Around 400 user accounts were compromised, and ether and other coins moves illegally.
Thus according to CEO Kris Marszalek, no regulatory agency has yet aided the platform.
Client assets are safe at this time, and clients that will harm will receive compensation.
System hacking has been a continuous issue in bitcoin. North Korean hacks on cryptocurrency platforms surged sevenfold in the last year, according to blockchain monitoring firm Chainalysis.
Not only Crypto.com, a large exchange with over 10 million subscribers hacked.
A large-scale security breach occurred at BitMart. Hackers were able to redeem funds worth up to $150 million, according to the CEO of the cryptocurrency trading site.
Last year, the online cryptocurrency exchange Liquid Exchange hacks and $80 million worth of cryptocurrency transfers, according to the exchange.
Binance to Protect its Users
Binance’s Chief Executive Officer Changpeng “CZ” Zhao declared that “funds are safe” at Binance, and that the Binance Secure Asset Fund size now serves as effective safety and protection for customers against such improbable concerns.
On January 18, the Binance cryptocurrency exchange became the first digital currency trading platform to join the National Cyber-Forensics and Training Alliance (NCFTA).
Binance blocked 281 Nigerian users yesterday in order to prevent international money laundering, according to CEO Changpeng Zhao.
