Binance hack: What we know about £4bn crypto heist
Cryptocurrency worth more than $6.3billion (£4.7bn) has been stolen from a major exchange, and has been labelled “the largest bank heist in human history” by one insider.
The hack targeted Binance, one of the world’s biggest crypto trading platforms, which has said it’s trying to get to the bottom of it as a matter of urgency.
Deposits and withdrawals have been suspended for customers, but the company maintains that users funds are safe and all hacking losses would be covered.
How did Binance get hacked?
Reports of a hack began surfacing on X early Thursday afternoon, when crypto observers pointed to large amounts of currency moving out of wallets associated with Binance.
Not long after, the company’s founder Changpeng Zhao confirmed the heist.
In a post on Thursday evening, Binance said the hacker appeared to have gained control of a laptop belonging to a contractor or employee.
Binance said that “the initial investigation suggests that the security incident may involve a compromised Dev0ps engineer’s laptop, which allowed an attacker to gain access to a service container and submit unauthorised withdrawal transactions”.
Who is behind the Binance heist?
US Blockchain analysis lab TRM Labs has attributed the attack to TraderTraitor, a North Korean state-sponsored hacking unit based on-chain and off-chain intelligence.
TRM Labs said the Binance attack shared characteristics with previous incidents linked to North Korea, including preparations made well before the theft and transaction signatures obtained in advance.
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“An attacker moved approximately $6.36billion out of Binance wallets on ten blockchains, most of it in about 20 minutes,” TRM Labs said in a blogpost on its website.
“TRM attributes the attack to TraderTraitor, North Korea’s elite hacking unit, based on rob use on and off-chain intelligence. We make this judgment with high confidence.”
Experts say North Korea has turned to crypto hacking and other illicit cyber activities as a source of badly needed foreign currency to support its troubled economy and fund its nuclear program in the wake of tough U.N. sanctions and other difficulties.
In December 2022, South Korea’s spy agency said North Korean hackers had stolen an estimated 1.5 trillion won ($1.1 billion) in cryptocurrency and other virtual assets in the past five years, more than half of it in 2022 alone.
It said North Korea’s capacity to steal digital assets was considered among the best in the world.
Which currency was stolen from Binance?
Early reports suggest the hacker took $1.5billion (£1.17billion) in Bitcoin and around the same in the stablecoin Tether.
Slightly under a billion dollars worth of Ethereum was taken too as well as the same amount in the USDC stable coin.
It is likely, however, that the hackers stole a number of other currencies too.
What is happening to people’s cryptocurrency?
Zhao posted Thursday on X that “User funds are safe!” but added that the theft “does look like a hack on Binance.”
He added that while he doesn’t manage Binance anymore, “as a shareholder, I expect all user funds will be fully covered.”
On Thursday, Binance said it would cover the losses from the apparent hack.
The event, meanwhile, also raises questions on why stronger approval controls were not in place, said Kok Tin Gan, cofounder and CEO of cybersecurity firm NyxLab.
“This looks like one signature that gave the attacker a never-expiring, full-access token to a Binance hot wallet,” he said, referring to cryptocurrency wallets that hold users' “private keys,” or unique authorizations, digitally and which are connected to the internet.
Binance said on X it had “found no evidence of any wallet private key leak” and that the company would release more technical details when its probe is complete.
How has the Binance hack impacted Bitcoin?
Nerves have been frayed by the record-breaking hack at Binance, which, as a result drove down bitcoin (BTC) and other cryptocurrency prices.
Bitcoin, which is the world’s biggest cryptocurrency, hit a six-week low before cutting losses to trade 1.1% lower at $77,876.
"I suspect the negative price action still has some way to go," said Geoffrey Kendrick, head of digital assets research at Standard Chartered. "Only after assets are unfrozen and more detail of the hack emerges will we find a new base."
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