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Crypto exchange Binance has halted all transactions earlier this morning after a single Syscoin was bought for 96 Bitcoin on its platform.

Syscoin Blockchain Attacked

The twitter feeds of both Syscoin and Binance confirm that Binance has stopped all transactions as Syscoin apparently experienced an attack on their blockchain.

“As a precaution, we had requested exchanges halt $SYS deposit/withdrawal today after we observed odd trading behavior coupled with atypical blockchain activity. After investigating the #Syscoin blockchain is safe. We are asking exchanges to reopen. Detailed wiki post tomorrow.”

Reports show that over one billion Syscoins were mined from a single even though the coin’s total potential supply has been established at 888 million. The company has not yet discovered what exactly had happened but has confirmed that a compromise occurred on their blockchain. Syscoin also has requested all exchanges to halt any trading of their tokens until the issue is solved.

Jameson Lopp, a Bitcoin developer believes that hackers could have exploited a weakness in the blockchain’s protocol:

“Breaking the monetary supply rules for a cryptocurrency can’t be accomplished via a 51% attack; this indicates that a flaw has been found and exploited at the protocol level, it’s likely similar to the buffer overflow vulnerability that was exploited in Bitcoin in 2010 that allowed someone to create 184 billion BTC.”

Binance Stops Trading

The hack on Syscoin appears to have determined Binance to suspend all trading, seeing as a single Syscoin token which is priced at $0.290380 at the time of writing was sold for 96 BTC worth $6.23 million on the exchange. The sale led to a major pump of Syscoin’s price, which experienced a surge of 85% in value according to coinmarketcap.com before the trading was suspended.

Binance then made the following announcement tweet:

The link in the tweet takes you to a notice that states:

Binance has removed all prior existing API keys and has now re-enabled API key creation. API users may now recreate their API keys from their user account center.

Another announcement regarding the re-opening of trading will be made once the maintenance is complete.”

Momentarily, neither Binance nor Syscoin is linking the attack on Syscoin’s blockchain with the suspicious sale of the coin on the Binance exchange but some Twitter users have connected the dots for them.

User @Ruben_Rotterdam posted how he thinks things went down:

” #Syscoin Binance hack in steps:

  1. Mine alot of $SYS
  2. Send $SYS to Binance
  3. Set very high sells vs. $BTC
  4. Hack Binance API
  5. Use $BTC of Binance users that use API to buy $SYS
  6. Take over $SYS mining power to prevent rollback of chain
  7. Hope to get $BTC out of Binance”

If the staggering sale turns out to actually be linked to the attack on Syscoin’s blockchain, it will be another of the many hacks that were intended to exploit the security vulnerabilities of altcoins and wallets.

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