The world's largest crypto currency exchange based on Trading volume, Binance, has an embarrassing incident on July 3, 2018. This is because hackers take advantage of the API hack (Aplication Programming Interface) that allows them to sell 1 Syscoin (SYS) for 96 Bitcoin (BTC).
Concerns about a possible hack arose when the new Syscoin basic protocol was rebuilt to avoid a 51 percent attack. The risk of this vulnerability is created because Syscoin is one of the "merged-mined" coins, which means it is combined and mined along with Bitcoin.
All SYS / BTC transactions on Binance are suspended for security reasons, once they confirm the API hacking via Twitter.
Syscoin confirmed the incident in Tweet:
"We are investigating possible problems with Blockchain Syscoin, no disturbance has been found, but we have asked the crypto market to stop trading while we investigate."
It is estimated that the hackers got several API keys from different users, purchased an overpriced SYS and took fake orders made in order. In addition, with the help of bots, hackers can achieve a final rate of 96 BTC per 1 SYS. There is no evidence of a new coin or Blockchain attacking a security hole. The billions of SYS moving from Binance purse probably come from the bot activity that trades.
However, Bitcoin developer Jameson Lopp believes the attack is not an API issue. He said that: "Hackers can exploit security holes in the Blockchain protocol, breaking the monetary supply rule for crypto currencies that can not be achieved through a 51 percent attack, indicating that the gap has been discovered and exploited at protocol level." Lopp made reference to a similar problem that occurred in 2010, when Bitcoin was exploited to create 186 billion BTCs.
After the investigation progressed, some media claimed that the Syscoin blockchain had been planned. However, this is not true because Syscoin is a crypto currency combined and mined with Bitcoin. In addition, reaching 51 percent of hashrates on the protocol is not an instant task.
Following the exchange problem caused by this hacking, the Syscoin price movement chart shows a big spike, with the SYS skyrocketing against BTC in no time. SYS / BTC is moving from 0.00003321 to the highest level of 0.0005099 BTC, sped more than 50% within 2 hours. However, the increase immediately disappeared several hours after the highest point was reached.
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