Investors withdrew $3.6 billion (£2.7 billion) of assets from Binance yesterday after the cryptocurrency exchange reopened following what is thought to be the biggest financial theft in history.
On Thursday, hackers stole around $6.3 billion in an attack that took around 20 minutes. Binance claims to have “replenished” around 90% of those assets into customer accounts, but the attack renews the “debate over the safeguards exchanges need to prevent a security breach from becoming a financial catastrophe”, said CoinDesk.
How did the breach happen? Binance co-CEO Richard Teng said on X that the security breach might have involved a “compromised” laptop belonging to one of the company’s engineers. But rather than a “single ‘one-click’ action”, this would have been a “more complex attack process”.
Crypto exchanges like Binance are “tempting targets” for hackers, said The Wall Street Journal. While traditional stock exchanges don’t hold the securities of their investors, crypto exchanges often store their customers’ cryptocurrencies, so hackers can directly access these funds by gaining control of crypto wallets.
Who was behind it? Based on “robust” evidence, crypto analysis firm TRM and other researchers have attributed the attack to a North Korean hacking unit, TraderTraitor. This has yet to be confirmed. If they were responsible, “it would be little surprise to US law enforcement officials and private experts,” said CNN. TraderTraitor has been “behind many of the largest crypto hacks in recent memory”, said The Wall Street Journal, including the then record theft of $1.5 billion last year from the Bybit cryptocurrency exchange.
What will happen next? Binance said on X that it had frozen more than $3 billion – around half – of the stolen crypto, meaning the hackers cannot move, transfer or cash out the assets. Recovering the losses will require a separate “legal process” involving court orders or a seizure warrant, TRM’s Ari Redbord told CNBC. Recovering Bitcoin – which accounts for around a quarter of the haul – is even “more challenging”, said CNBC, “because they have no issuer that can directly freeze the assets”. Recouping the missing funds could “take months or years”.
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