Cryptocurrency exchange Binance halts trading after detecting irregular SYS trading activity
Binance -- the largest cryptocurrency exchange in the world -- temporarily halted all trading after it detected "irregular trading on some APIs".
As a precautionary measure, the exchange removed all existing API keys and asked users to re-create theirs from their accounts. The measure meant a suspension of trading, withdrawals and other account activity. The matter is related to the Bitcoin fork Syscoin which halted deposits and withdrawals, but Binance stressed that there had not been as hack and that its blockchain is safe.
Both Binance and Syscoin have promised that more information will be shared soon about what happened. It's not clear whether the delay in publishing this information is because an investigation is still underway, or because details cannot be shared for security reasons until additional measures have been put in place.
Trying to reassure users that it had done everything it could to get the matter under control, Binance outlined in a blog post the steps it had taken:
- To protect the safety of our API users, we have removed all existing API keys and requested all API users to recreate their API keys. We implore our users to take care of their API keys going forward:
1) If you are not a regular API user, please do not create an API key.
2) Do not give any third-party service providers access to your personal API key.
3) Use the IP whitelist functionality to ensure your key is only accessible to you.
- Rollback of irregular trades.
- For the users who were negatively affected by choosing to trade the rising SYS price, Binance will offer zero-fee trading between 2018/07/05 - 2018/07/14. If you traded SYS during the incident and believe you were negatively affected, please open a support ticket.
- For all other Binance users, we will offer a 70% rebate on the trading fees received from you (does not include referrals) between 2018/07/05 - 2018/07/14. The rebate will be given in the form of BNB calculated using the closing price on 2018/07/14.
- To protect the future interests of all users, Binance will create a Secure Asset Fund for Users (SAFU). Starting from 2018/07/14, we will allocate 10% of all trading fees received into SAFU to offer protection to our users and their funds in extreme cases. This fund will be stored in a separate cold wallet.
Far from seeing the problem as a setback, Binance is trying to see the matter -- publicly at least -- as a positive thing:
Since founding, Binance has always upheld our core values of spreading crypto and protecting users. Binance has achieved explosive growth in the first year. With this growth, we also experience many problems. We must reflect upon these problems, learn from them, and improve ourselves. We know in the course of making history, we will be tested again and again. We believe every test makes us stronger. And only if we fight together, can we move the industry forward. We thank all of our supporters, those who nudged us forward. We welcome your comments, suggestions and feedback. Thank you for being with us on our journey. Binance will continue to push forward.
Over on CoinDesk, Syscoin's problems are revealed in a little more detail:
Though Syscoin has not yet disclosed details from its investigation, the issue appeared to have resulted in unusual transactions on Binance's SYS order books, which accounted for over 87 percent of the token's total trading volume, data shows.
The 24-hour price high data from Binance indicates that at one point one SYS was worth 96 BTC while its price had previously maintained around 0.00004 BTC. Yet it is unclear how many SYS tokens might have been executed at the unusual price.
In a response to CoinDesk's enquiry, Syscoin's co-founder Sebastien DiMichele said: "My understanding is that yes, Syscoin was sold for 96 BTC per unit at one point today. We saw massive bot activity, our community let us know that they were having trouble with deposits at Binance."
More information should start to trickle out in due course.