Binance has found itself at the center of an unusual trading bug that has created big winners and losers. In a matter of minutes, viacoin pumped by 70x. Just to compound the drama, bitcoin experienced a massive sell-off shortly afterwards following bearish news from the SEC. Binance suspended withdrawals while it investigated the matter, but these have since been reactivated. Wednesday March 7 will go down as a memorable day in the exchange’s short history, but one with a happy ending.
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Viacoin Goes on a Moon Mission
Pump and dump schemes are not unusual on cryptocurrency exchanges, but this wasn’t a usual pump. This was a mega pump which sent viacoin from $3 to $200 in record time. Binance wasn’t hacked. Rather, a compromised API is the culprit behind what was an extremely clever attack. First, the bot sold all the altcoins in accessible accounts at market prices, causing a sea of red. Then, it took the BTC profits and put them into viacoin. It may have occurred illegally, but if ever there were a case of a moon mission, this was it, as one Twitter user memorably depicted, the green candle standing proud in the center:
The candle viacoin produced was a spectacular one, as the misappropriated crypto of potentially hundreds of traders was used to send the coin sky-high. One trader boasted of having made $300,000 in BTC from the pump and then withdrawing it to Coinbase before Binance caught on and disabled withdrawals. The user’s Twitter account disappeared shortly afterwards. Another reportedly lost 0.5 BTC, although Binance has since restored all customer funds.
Bots Blamed for Beastly Binance Bug
Altcoinbot.io has been suggested as the likeliest culprit behind the scam. Typically, such bots require traders to submit an API key linked to an exchange. This key permits the bot to make trades on their behalf, but not withdrawals, hence the pattern of dumping affected users’ altcoins and then pumping VIA. As the mother of all pumps unfolded, viacoin dev Romano was forced to go on the defensive, with some people suggesting the scheme was of his doing.
The conspiracy theories were bolstered by the fact that Romano had spoken of tinkering with his own trading bot in the last few days. He seems to have had no inkling of this event in advance, however, and there is no evidence that points to his involvement. “At least the hacker has a good taste,” he wisecracked, adding “Jokes aside I have nothing to do with Binance acting weird. If rumors are true, kinda wish they bought another coin instead of Viacoin. Probably they chose the coin with the lowest marketcap, being the easiest to buy up.”
Rumors are circulating that some traders had advanced warning of the VIA pump.
In a statement, Binance said:
