Binance has suspended all transactions earlier this morning after a single Syscoin was purchased for 96 Bitcoin on the exchange.
Syscoin Blockchain Compromised
Information coming from both Syscoin and Binance twitter feeds confirm that Binance has halted all transactions and Syscoin has suffered an attack on their blockchain.
As a precaution we had requested exchanges halt $SYS deposit/withdrawal today after we observed odd trading behavior coupled with atypical blockchain activity. After investigating the #Syscoin blockchain is safe. We are asking exchanges to reopen. Detailed wiki post tomorrow. pic.twitter.com/NEypr531zi
— Syscoin (@syscoin) July 4, 2018
It is being reported that more than one billion Syscoin was mined from a single block despite the fact that the cryptocurrency’s total potential supply is set at 888 million. The company has yet to determine what has happened but has confirmed their blockchain was compromised and that they have requested all exchanges to suspend any trading of their tokens for the time being.
Jameson Lopp, a Bitcoin developer was quoted by Hard Fork about how hackers could have exploited a vulnerability in the blockchain’s protocol:
“Breaking the monetary supply rules for a cryptocurrency can’t be accomplished via a 51% attack; this indicates that a flaw has been found and exploited at the protocol level, it’s likely similar to the buffer overflow vulnerability that was exploited in Bitcoin in 2010 that allowed someone to create 184 billion BTC.”
Binance Halts Trading
The hack on Syscoin seems to be related to Binance suspending all trading due to one Syscoin with a value of $0.453290 at the time of writing being sold for 96 BTC worth $6.23 million on the exchange. The sale resulted in a massive pump of Syscoin’s price as it shot up 85% in value according to coinmarketcap.com, before trading was halted.
Binance’s twitter page is currently showing this latest announcement tweet:
API Key Creation Now Re-enabledhttps://t.co/ntu8n3M9IE pic.twitter.com/8xWDlgpkbd
— Binance (@binance) July 4, 2018
Which links to a notice stating:
“Binance has removed all prior existing API keys and has now re-enabled API key creation. API users may now recreate their API keys from their user account center.
Another announcement regarding the re-opening of trading will be made once the maintenance is complete.”
At the time of writing, neither Binance nor Syscoin is correlating the breach on Syscoin’s blockchain with the dubious sale of the coin on the Binance exchange but others in the Twitterverse are making that connection for them.
#Syscoin Binance hack in steps:
1. Mine alot of $SYS
2. Send $SYS to Binance
3. Set very high sells vs. $BTC
4. Hack Binance API
5. Use $BTC of Binance users that use API to buy $SYS
6. Take over $SYS mining power to prevent rollback of chain
7. Hope to get $BTC out of Binance
— Ʀu฿en (@Ruben_Rotterdam) July 3, 2018
If the inflated sale does turn out to be related to the attack on Syscoin’s blockchain it will be just the latest in a series of hacks aimed at exploiting altcoins and wallet security vulnerabilities.