Crypto Exchange BingX Confirms Security Breach, Suspends Withdrawals

In a startling development for the cryptocurrency industry, Singapore-based exchange BingX has confirmed a security breach affecting its hot wallet. The incident, which occurred in the early hours of September 20, 2024, has led to a “minor asset loss” and prompted the exchange to implement emergency protocols.

Vivien Lin, Chief Product Officer at BingX, disclosed the breach in a post on X (formerly Twitter). According to Lin, the exchange’s technical team detected “abnormal network access” around 4 AM Singapore time, raising suspicions of a potential hacker attack on BingX’s hot wallet.

Immediate Response and Asset Protection

Upon discovery of the suspicious activity, BingX swiftly initiated its emergency plan. This included the urgent transfer of assets and the temporary suspension of withdrawals. Lin emphasized that BingX employs a layered management system, with the majority of user funds stored in cold wallets and only minimal amounts kept in hot wallets for withdrawal purposes.

“To ensure security, withdrawals have been temporarily suspended while we conduct an emergency inspection and strengthen wallet services,” Lin stated. She assured users that withdrawals would be restored within 24 hours at the latest.

Extent of the Breach

While BingX has confirmed the security incident, the full extent of the asset loss remains unclear. Blockchain security firm PeckShield reported observing a “suspicious significant fund outflow” from BingX totaling over $13.5 million. Meanwhile, analytics platform Lookonchain estimated losses at $26 million.

Lin described the asset loss as “minor” and “manageable,” stating that it would not affect BingX’s business operations. The exchange is still calculating the exact amount lost.

User Compensation and Asset Safety

In a separate post, Lin reassured users that BingX would “fully compensate” for the losses and emphasized that user assets were safe. The exchange is currently developing a compensation plan to address any losses incurred due to the breach.

Community Reaction and Criticism

The incident has sparked concern and criticism within the cryptocurrency community. Harrison Leggio, co-founder of crypto startup g8keep, questioned BingX’s initial communication about the situation, which described it as “wallet maintenance” rather than a potential security breach.

Some users reported delays in processing withdrawals initiated before the official announcement, while others noted that messages discussing the potential hack were deleted from BingX’s official chat groups.

Ongoing Investigation

BingX is currently conducting a thorough investigation into the incident. The exchange has promised to provide more details soon, including the final calculation of losses.

This security breach serves as a stark reminder of the ongoing challenges faced by cryptocurrency exchanges in protecting user assets. As the situation develops, the crypto community will be watching closely to see how BingX handles the aftermath and what measures it implements to prevent future incidents.