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Binance Not Liable for User’s $1M Loss, Co-Founder Claims

Published

6 months ago

June 3, 2024

Coin2049 Newsletter

Binance Co-Founder Yi He has publicly addressed allegations surrounding a security breach that reportedly led to a user losing $1 million in cryptocurrency. He stressed that the loss was due to the user’s compromised personal computer and not Binance’s platform security flaw. This statement follows accusations from a crypto trader, Nakamao, who claimed a significant loss through manipulated trades on his account.

Yi He Denies Binance Fault in Hack

Yi He clarified the situation in a detailed response, explaining that the user’s account was accessed via a compromised computer. According to her, the crypto hacker sold the victim’s cryptocurrency after gaining access, which resulted in trading losses. He emphasized that Binance’s security systems were intact, and the breach did not stem from the platform itself. “Look closely; this user’s account was breached because their computer was hacked; they are a lost cause,” He wrote in a public statement.

Meanwhile, Nakamao provided a different perspective, stating that the hacker manipulated his Binance account by controlling his web cookies. “Afterwards, the security company told me the hacker was manipulating my account by holding my web cookies hostage,” he explained. He described how the hacker executed transactions in highly liquid USDT trading pairs and placed unreasonable sell orders in less liquid pairs like BTC and USDC.

Binance Quick to Freeze Hacked User Account

In response to the incident, Binance’s customer service department claimed the breach was conducted through a malicious plug-in that allowed the hacker to impersonate Nakamao. The service team acted swiftly, freezing the affected account within one minute and 19 seconds of receiving the freeze request. However, by then, several leveraged trades had already been executed. “We sympathize with your experience, but according to the information we have learned so far, the reason for your asset loss is that your related devices were manipulated because of the installation of malicious plug-ins,” Binance’s statement detailed.

Despite the quick action, Nakamao contested Binance’s explanation and handling of the situation. He alleged that Binance had prior knowledge of the malicious plug-in and accused the platform of not taking earlier action to warn users. “It turns out that Binance knew about the existence of this plugin a long time ago and even encouraged the KOL to get more information from the hacker,” Nakamao claimed.

Further addressing the issue, Yi He advised users on the importance of maintaining secure login practices, especially regarding active cookie plug-ins. She reiterated that Binance cannot compensate users whose login devices are compromised by their actions. “Binance is not able to compensate users when their login devices are compromised,” she urged users to avoid minor conveniences that compromise security.

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