An exploit allowed $4.6 million in Filecoin tokens to be deposited more than once on Binance. Both Filecoin and Binance have claimed to be an API mistake as opposed to a bug. The issue resulted due to a blockchain attack that allows the same cryptocurrency to be spent twice.

Binance’s Double Deposit of FIL Issue

The issue of double-spend results when the same funds on a blockchain are spent twice, even though Bitcoin and other cryptocurrencies’ proof-of-work algorithm was designed to prevent these. However, it appears that a Filecoin feature allowed users to trick crypto exchanges into accepting a deposit twice.

Meanwhile, the transaction only happened once on the Filecoin blockchain, even though Binance mistakenly accepted the transaction twice. This signifies that the result was more like a double deposit than a double spend.

As a precaution, Binance temporarily halted the deposits of Filecoin’s token in response to the double deposit.

A Binance spokesperson said:

“The issue was caused by the incorrect use of the Lotus (Filecoin’s software suite) API logic and its integration in transferring and depositing into the Filecoin Network.”

There was no loss of funds, added the spokesperson.

API Mistake Due to Filecoin Bug

6Block, a China-based Filecoin mining firm, discovered the bug after accidentally exploiting it.

When it was noticed that 61,000 FIL transaction worth $4.6 million to Binance was taking longer than usual, a replace-by-fee (RBF) transaction was implemented to speed it up.

A replace-by-fee transaction takes place when a user broadcasts a new transaction to replace an older, unconfirmed transaction, with the goal of speeding up its confirmation.

However, the particular RBF transaction resulted in the deposit showing up in their Binance account twice, or turning the 61,000 FIL into 120,000 FIL.

Meanwhile, the second 61,000 FIL token never actually showed on Binance’s wallet as the exchange was tricked into crediting the deposits twice because of the bug in Filecoin.