Cryptocurrency exchange Binance issued a notice on Sunday acknowledging reports that a handful of altcoins were trading “abnormally” on its platform. The exchange said it would investigate the matter and take appropriate action against “suspicious accounts”.
Binance CEO Changpeng Zhao, also known as “CZ”, later said that the price movements appeared to be “just the behavior of the market”. He explained that an account deposited funds into a trading account, started buying some coins, and others followed suit.
Based on our investigations so far, it appears to be just market behavior. A guy deposited funds and started buying. (Pirates don’t deposit). Other guys followed. Unable to see link between accounts. 1/3 https://t.co/QlB1VnlHVs
However, he said Binance had temporarily restricted accounts associated with the altcoin trading that had taken place, preventing them from being able to withdraw their funds. The decision was reversed after the company “received numerous complaints on social media” from users in various countries, Zhao said.
In a subsequent tweet, Zhao acknowledged that there is “too much intervention” in maintaining an exchange that operates in an industry centered on the notion of decentralization. There is a “balance” between the appropriate amount of intervention, he said, adding that sometimes it is worth letting similar situations “unfold”.
We are aware of the concept of too much platform intervention, “too centralized” attacks, etc. There is a balance between the scale of our intervention. Sometimes this happens in the open market and we have to let things play out. 🙏 3/3.
In its statement, Binance said the trading activity in question on Sunday did not appear to be the result of compromised customer accounts or stolen API keys, but said it would provide updates if more relevant information becomes available.
This activity does not appear to be due to compromised accounts or stolen API keys; funds are SAFU.
We will update this thread if there is new information.
The clarification comes after one of Binance’s users, who has since had his account suspended, raised concerns last week that an API key had been leaked via intermediary trading platform 3Commas, leading him to lose funds.
Hi guys. Unfortunately, two days ago my Binance account was exploited through an API I created 2 years ago and haven’t used since, which I assumed I deleted, but apparently not. It has been used to trade low cap coins to drive up the price in order to make a profit.
The user, who goes by CoinMamba on Twitter, exchanged a series of tweets with Zhao about the missing funds. CoinMamba said “it would be nice” to get a refund, but was mostly upset about the lack of quick action.
Zhao replied that this was not a situation that warranted a refund, adding that it was important for everyone to keep their API key safe.
We have over 20 people investigating. I now know the extent of your loss, your IP address, etc. Honestly, this is not a compensation case. Social influence won’t change that. We treat all users the same. It is important to ensure that your API key is secure. 🙏
In a now-deleted Tweet, Zhao also said he was also considering restrictions on CoinMamba’s account in addition to 3Commas, as Binance doesn’t “want to serve people who are unreasonable.”
CoinMamba later claimed that his account was shut down due to statements he made on Twitter. Binance’s customer support team’s Twitter account responded, claiming that CoinMamba’s account was set to “withdrawal-only mode” due to “threats” allegedly made by the user.
Your account has been placed in withdrawal-only mode. The decision was in response to threats you made to our CS, unrelated to our dialogue on Twitter. We have assembled a team of over 20 caseworkers to try to help you. We are sorry to come to this, but wish you all the best. pic.twitter.com/lTkKy2WnJS
3Commas had published a Press release Saturday to answer questions about attacks on their platform and API keys. The post urged users affected by the attackers to file police reports as soon as possible so that funds can be frozen and potentially recovered. He also warned 3Commas users to beware of phishing attacks.
On Sunday, 3Commas also released a statement on Twitter claiming “false rumours” were being spread online by “bad faith actors” who accused the platform of leaking users’ API keys. 3Commas said the rumors were linked to fake screenshots.
There have been false rumors shared by bad faith actors using falsified evidence to claim that 3Commas leaked users’ API keys. These rumors were linked to fake Cloudflare logs screenshots that were shared on Twitter and Youtube. The full article: https://t.co/KVOF2BWlYnpic.twitter.com/qJ52CvnVg0