Yi He, co-founder of the crypto exchange Binance, has rejected allegations that a security flaw on their platform led to a user losing $1 million.
On June 3, Yi He clarified the situation by stating:
"Look closely, this user's computer was hacked, and it's really hard to save him. The hacker could not withdraw funds, so he sold the victim's coins, making him lose all the money."
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The controversy started when crypto trader Nakamao reported losing his entire account balance, accusing unknown entities of "counter-trading" without accessing his Binance password or two-factor authentication (2FA) details.
Nakamao said:
<A> security company told me that the hacker was manipulating my account by holding my web cookies hostage. The hacker bought the corresponding tokens in the USDT trading pair with abundant liquidity, and placed limit sell orders exceeding the market price in the BTC, USDC and other trading pairs with scarce liquidity.
Nakamao described how the hacker placed numerous leveraged bets, leading to nearly $1 million in losses when the trades failed. He noted that during the entire incident, he did not receive any security warnings from Binance.
Binance's customer service team responded, informing the victim that the hacker used a plug-in to steal their account login details and impersonate them to conduct operations and transactions.
Binance claimed that they processed Nakamao's request to freeze his account within "1 minute and 19 seconds" of receiving it. However, the hacker had already conducted several leveraged trades by then.
Binance's official response stated:
We sympathize with your experience, but according to the information we have learned so far, the reason for your asset loss is that your related devices were manipulated because of the installation of malicious plug-ins. Unfortunately, we have no way to compensate for such cases that have nothing to do with Binance.
Nakamao disagreed with Binance's conclusion, asserting that the platform had known about the plug-in long before his account was breached. The victim alleged:
It turns out that Binance knew about the existence of this plug-in a long time ago and even encouraged the KOL and the hacker to obtain more information. My information was stolen when the plugin was further promoted. Binance tracked down the hacker's address at least 3 or 4 weeks ago and also obtained the name and link of the plugin from the KOL.
Nonetheless, as the co-founder emphasized, Binance can't be held responsible for losses resulting from hacked user devices.
In other news, crypto investigator ZachXBT has recently connected the team behind the memecoin CAT to a hack of crypto investor GCRClassic's X account, accusing them of sniping and executing pump-and-dump schemes.
