Binance

Summary

Hackers stole more than $6 billion in crypto from Binance in about 20 minutes, with roughly half in stablecoins that were quickly frozen by issuers and the rest in tokens like bitcoin and ether that are likely unrecoverable. The exchange's losses could top $3 billion, exceeding its $1 billion emergency fund, though it pledged to cover losses using reserves and other assets while assuring users their funds are safe. Deposits and withdrawals were suspended, and researchers observed unprecedented laundering patterns involving thousands of automated transactions designed to obscure the trail of funds.

Motives

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TTPs

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Description

On Thursday, hackers siphoned more than $6 billion from Binance, the world's biggest cryptocurrency exchange, in approximately 20 minutes. Roughly half of the stolen funds consisted of stablecoins, which were quickly frozen by the firms that issue them. The remaining funds were tied to digital tokens such as bitcoin and ether, which do not have centralized governing authorities and are likely impossible to recover according to crypto researchers. Researchers estimated that Binance's losses could top $3 billion. The exchange held $155 billion in total user assets at the time. The stolen amount eclipsed the $1 billion emergency fund Binance had set aside for situations like this. Binance suspended deposits and withdrawals on Thursday following the theft. The incident occurred just hours after a smaller security breach throttled operations at Polymarket, the crypto-powered prediction market. That Polymarket breach was the second apparent hack of the platform since June and was likely unrelated to the Binance incident. Some 700 Polymarket users lost $2.7 million in unauthorized withdrawals according to analytics firm Bubblemaps. Like Binance, Polymarket promised to make customers whole.

Binance pledged to cover the losses with its emergency reserves and other assets, emphasizing that user funds are safe. The company was founded in China but lacks a fixed headquarters. Binance pleaded guilty in 2023 to violating US federal anti-money-laundering rules among other charges. Its Canadian founder, Changpeng Zhao, was imprisoned for four months in connection with that case. Zhao was pardoned by President Donald Trump last year but remains legally prohibited from running Binance. Researchers at Chainalysis said they observed laundering patterns they had not seen before in connection with the theft. Thousands of transactions in a short period suggested that attackers were using automation to obscure the trail of funds. Centralized exchanges like Binance have become high-value targets for hackers in part because they exist outside the strict regulations that banks and other financial institutions must adhere to. In the United States, the vast majority of people investing in crypto do so through centralized exchanges that lack the kind of federal deposit insurance provided by traditional banks. The exchange's losses represented a small fraction of its total user assets but exceeded its dedicated emergency reserves.

Sources

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