Binance Hack: From A Blockchain Analysis Perspective

BINANCE HACK
from a blockchain analysis

perspective
Prepared by Hacken & CER

Using Crystal Analytics Tool
THE KEY MESSAGE IS
ALL EXCHANGES SHOULD IMMEDIATELY BLACKLIST THE
FOLLOWING BTC ADDRESSES
Blacklisting these addresses will make it more

difficult for the hacker to offload BTC on other
exchanges
No one is 100% protected from hacker attacks.

This is our opportunity to unify efforts to
become stronger against such hacks
Hacken and CER are monitoring all movements

associated with wallets cited to the left and
will share updates as we receive them
WHAT HAPPENED?
INPUT ANALYSIS
E8b406091959700dbffcff30a60b190133721e5c39e89bb5fe23c5a554ab05ea
2 Input Addresses:
1NDyJtNTjmwk5xPNhjgAMu4HDHigtobu1s - main Binance hot wallet
3CTPRyUbCKkByGmAVvDV6ReZXT1WfV3UPd – vehicle address for Binance hot wallet
71 Inputs:
70 inputs 100 BTC each from 1NDyJtNTjmwk5xPNhjgAMu4HDHigtobu1s
1 input 74.19 BTC from 3CTPRyUbCKkByGmAVvDV6ReZXT1WfV3UPd
Conclusion: The analysis above indicates the max amount of 100 BTC was withdrawn from 70 “2nd Verification
Level” accounts.
WHAT HAPPENED?
OUTPUT ANALYSIS
E8b406091959700dbffcff30a60b190133721e5c39e89bb5fe23c5a554ab05ea
44 Output Addresses:
20 new wallets were created containing 7,070.96 BTC
24 existing wallets containing 3.22 BTC
HISTORICAL OUTPUT ANALYSIS
WHAT ARE HOT & COLD WALLETS POLICIES?
For the last 6 months the biggest common output was 2,000 BTC which occurred 57 times. All
withdrawals were conducted to Binance’s cold wallet.
On March 28th, 2019, a withdrawal of 6,020 BTC was conducted in 4 batches, each batch not
exceeding the 2,000 BTC withdrawal limit. Such grouping may indicate the existence of a hot
wallet output transfer policy - no output can be above 2,000 BTC:
07cfcb4eda27e58a3ca5408302fa8e590e98040cfdb0729424a3e597e8811519
B032d5fa88a2cfb442afe2a746b60ece4fa745ee056a3b0d3738d5d57d084664
A7640e5476cbb0068281f0a068acdc10b1bca61906f2cb4145f86e7561d9855a
143afacd01ebd7a870afe68ae969b3f2991a20c0a066b84350db9872335e6476
The latest largest withdrawal was for the amount of 2,091 BTC where BTC was sent from a Binance
hot wallet to the following accounts:
Hot wallet address: 4d058fe942e068682e2b7faa43877ac95ecffe4ac9ecf863eea5a1c9f51dbc9b
999.99 BTC to Coinbase
999.99 BTC to Bitstamp
91 BTC other various external trx combined in one
Conclusion: Based on the pattern of large withdrawals Binance has conducted, we believe they have
a 2,000 BTC withdrawal limit policy in place.
HISTORICAL OUTPUT ANALYSIS
WHAT ARE HOT & COLD WALLETS POLICIES?
During the past 6 months, there were only two withdrawal transactions above 2,100 BTC:
19.12.2018 for the amount of 2,400 BTC – 500 BTC to Kraken and 1,706 BTC to 3MmX8JfumgnV7yEPrD4weHZximdQ2ijH5Z
15.11.2018 for the amount of 10,000 BTC – transfer to cold Binance wallet. 2,000 BTC policy breaker
Last transaction above 2,500 BTC from Binance’s hot wallet directly to an external address was more
than 1 year ago (February 10th, 2018) when 30,000 BTC was moved to a series of undefined external
wallets:
E5b282a85d9b74cdca48d0323011492c3ef4deba7791e44edeefe96090a7d990
The latest biggest external transaction from Binance was on April 2nd, 2019, for the amount of 9,887
BTC. It was done through a series of transactions from Binance’s 2nd biggest cold wallet
34xp4vRoCGJym3xR7yCVPFHoCNxv4Twseo:
061e9d8dc9baefb5d41aa923526d5df45cbad705a584df38bdc433479499c2cf
Conclusion: Transactions above a certain amount are handled manually and are usually withdrawn from
cold wallets.
BINANCE BALANCE OVERVIEW
According g to official statement, Binance’s biggest and main hot wallet was hacked
The Hacker knew the approximate inflow/outflow and balance on the day of the hack
Conclusion – The Hacker withdrew the amount that was available in the hot wallet and not the
amount accessible to the individuals reach.
Current balance at 14:12 08 May 2019 4,213
Total input after the Hack 3,834
Total output after the Hack 85
Total amount hacked 7,079
Balance at the moment of Hack 7,373

KEY QUESTION. USERS HACK OR BINANCE
HACK OR INSIDER JOB?
Attack vector on user:
Hacker gained access to Binance’s biggest accounts, login, and password:
This can be done through bruteforce techniques if accounts are identified and
compromised
This can be mitigated by adding additional controls for checking new or
existing users logins and entered password in leaked databases aggregators like
https://haveibeenpwned.com/
Hacker bypassed 2FA:
2FA bypass methodology – this needs to be done individually for every compromised
account. Quite difficult not to be noticed if you need to hack 70 accounts
Hacker got access to users email
Each Binance withdrawal needs confirmation by email. Hacker needed access to email
as well
Attack vector on Binance servers:
Hacker got access to Binance’s login & password databases as well as to secret
one-time-password (OTP) database.
Hacker bruteforced the biggest accounts, email, and manually confirmed withdrawals
Hacker targeted Binance’s executive accounts who had access to hot wallet private keys:
Phishing
Physical theft
Viruses
WE HOPE NOT
ARGUMENTS
Binance Hack Users Hack Insider Job
The amount hacked equates to 95% of the hot Publicity of the announcement. If that Could be a third party insider job
+ wallet balance (as of May 8th, 2019) was internal leakage, most probably would
not be disclosed
Could be relatively easy to exercise if Binance’s public statement for attack Unintentional lack of attention from
+ C-level executive access point was vector C-level executives
compromised
No significant withdrawals from hot wallet Most common hackers technique

+ to external accounts for the past 6 months
Binance public statement Hot wallets withdrawal policy of 2,000 Existence of hot wallets policies
- BTC decreases the number of individuals who
can execute the hack
Not the best time for attack - two days Complexity of the simultaneous control Acknowledgement of complexity for stolen
- before the hot wallet balance was over 9k over compromised accounts funds usage
BTC
No significant withdrawals from hot

- wallet to external accounts for past 6
months
SUMMARY
We are sharing results of our blockchain analysis and not pushing any
conclusions
Results of the Binance internal investigation should be made available to

the public
Most of the crypto exchanges funds have to be kept at cold storages
Hot & cold wallets private key management has to be reviewed by 3rd party
digital assets auditor
ABOUT HACKEN AND CER
Hacken is a cybersecurity consulting company with high profile clients that
is focusing on the blockchain industry by offering the following services:
- Cybersecurity Consulting
- Smart Contract Auditing
- Penetration Testing
- Digital assets auditing
- Crowdsourced Security Management
CER (Cryptocurrency Exchange Ranking) focuses on ranking cryptocurrency
exchanges by their Blockchain Balance and CyberSecurity Score. The following
certifications are conducted to ensure a cryptocurrency exchange is
transparent with its user base:
- Proof of Funds CERtification
- Cybersecurity CERtification
- CryptoCurrency Exchange Due Diligence
SPECIAL THANKS TO FOLLOW US
Follow Hacken and CER for more blockchain
security insights
The Crystal™ platform is the all-in-one blockchain
analytics tool. Designed for financial
institutions and law enforcements, Crystal
provides a comprehensive view of the public
blockchain ecosystem and uses advanced analytics
/Hacken.io /CER.Hacken
to map suspicious transactions and related
@Hacken_io @CER_Hacken
entities.
Follow Crystal™ on social media:
/CrystalBlockchainAnalytics
@CrystalPlatform

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BINANCE HACK

from a blockchain analysis

Prepared by Hacken & CER

Blacklisting these addresses will make it more

No one is 100% protected from hacker attacks.

Hacken and CER are monitoring all movements

Current balance at 14:12 08 May 2019 4,213

Total input after the Hack 3,834

Total output after the Hack 85

Total amount hacked 7,079

Balance at the moment of Hack 7,373

No significant withdrawals from hot wallet Most common hackers technique

No significant withdrawals from hot

Results of the Binance internal investigation should be made available to

Most of the crypto exchanges funds have to be kept at cold storages

Follow Crystal™ on social media:

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