Bitcoin Price Sinks Amid Hack Attempt on Cryptocurrency Exchange Binance

Bitcoin prices continued to unravel during a hectic week punctuated by SEC scrutiny and an attempted hack on popular cryptocurrency exchange Binance. The price of one bitcoin token was about $9,820 as of this writing, a drop of 1.09% during the past 24 hours.

BTC prices hit a low of $9,530.779 and a high of $10,115.39 during the past 24 hours on increasing trading volume, according to WorldCoinIndex. Of the top 10 most valuable cryptocurrencies by market cap, 8 experienced price drops. The only exceptions were Ethereum Classic and Viacoin.

Yesterday, the cryptocurrency market was roiled by an attempted hack on Binance. The Japan-based exchange, which has $1.77 billion worth of virtual currencies on its platform, is one of the top three exchanges in the world by trading volume. (See also: Bitcoin Trading Volume Plunges to Two-Year Low.)

Binance Hack Attempt: 'No Funds Have Been Stolen'

The hacking rumors first surfaced on Reddit and Twitter. One Reddit user wrote: "WTF is happening! Binance just sold all my alts at market ‎rate and I have got just the bitcoin now. Is it because of account getting hacked or Binance ‎bot issue?"

Binance has since released a statement insisting it had not been hacked. "This was part of a large-scale phishing and stealing attempt," the exchange wrote on its website. "So far: All funds are safe and no funds have been stolen."

Binance explained what happened:

The hackers accumulated user account credentials over a long period of time. The earliest phishing attack seems to have dated back to early Jan. However it was around Feb 22, where a heavy concentration of phishing attacks were seen using unicode domains, looking very much like binance.com, with the only difference being 2 dots at the bottom of 2 characters. Many users fell for these traps and phishing attempts. After acquiring these user accounts, the hacker then simply created a trading API key for each account but took no further actions, until yesterday.
Yesterday, within the aforementioned 2 minute period, the hackers used the API keys, placed a large number of market buys on the VIA/BTC market, pushing the price high, while 31 pre-deposited accounts were there selling VIA at the top. This was an attempt to move the BTC from the phished accounts to the 31 accounts. Withdrawal requests were then attempted from these accounts immediately afterwards.
However, as withdrawals were already automatically disabled by our risk management system, none of the withdrawals successfully went out. 

Hacking remains a huge concern in the wake of several high-profile cryptocurrency hacks over the years. The most recent one involved Coincheck, where cyberthieves stole 500 million NEM tokens worth $400 million from its trading platform in January 2018. (See more: Coincheck.)

Regulators Turn the Screws

Another event that shook the market was a surprise announcement by the Securities and Exchange Commission mandating that all crypto exchanges must register with the agency. This was not welcome news for crypto evangelists. (See more: Bitcoin Price Tumbles Below $10k As SEC Says Exchanges Must Register With It.)

Regulators around the world are starting to turn the screws on the digital currency market. Just last week, the Russian government announced it will criminalize the use of bitcoin as a substitute for money and said it will roll out detailed crypto regulations by July 1. (See more: Russia to Criminalize Bitcoin Use as Money Substitute: Putin to Roll Out Laws.) 

The governments in South Korea and China have already introduced regulations and guidelines during the past few months. As virtual currencies inch toward mainstream adoption, it's only a matter of time before regulators try to rein in the decentralized, unregulated marketplace. There's sure to be a lot more activity in the coming months.

The price of a single bitcoin at the time of writing was $9,820.

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