Binance loses billions in cyber attack
The world’s biggest cryptocurrency exchange, Binance, faces a major cybersecurity crisis after hackers executed what it calls a “complex attack,” draining approximately $6.3 billion in digital assets. Through collaboration with partners, including stablecoin providers Tether and Circle, the exchange has already secured around $3 billion of the stolen funds to prevent money laundering or conversion.
Blockchain intelligence firms such as TRM Labs and Chainalysis believe the attack was undertaken by TraderTraitor, a state-sponsored North Korean hacking unit, reportedly linked to the Lazarus Group.
The company initially posted contradictory messages, insisting that “user funds are completely safe” but also saying it would “cover all losses.” Binance later confirmed that the total estimated impact is around $6.3 billion.
Investigation and Response
According to Binance, further investigations revealed multiple points of entry for the breach, unlike initial reports that indicated a single compromised laptop was involved. The exchange is collaborating with law enforcement agencies, blockchain intelligence firms, and industry partners to track and block additional assets.
TRM Labs expressed strong confidence that TraderTraitor was responsible for the Binance hack, pointing to substantial on-chain and off-chain data. The firm noted several aspects of this attack resemble previous cyberattacks linked to North Korea.
TraderTraitor is thought to be a faction of the Lazarus Group, which became infamous in 2014 after being accused of hacking Sony Pictures as retaliation for the movie “The Interview,” which made fun of North Korean leader Kim Jong Un.
Deposits and Withdrawals
Around 0900 GMT on Friday, Binance stated it was planning to restore withdrawals within 45 hours, having previously halted all deposits and withdrawals temporarily. The company clarified that deposits remain unaffected.
Initially, Binance suggested the hack stemmed from a compromised laptop used by a DevOps engineer, enabling the unauthorized entity to access a service container and carry out illicit withdrawal transactions. However, a later investigation has identified additional points of entry.
Paolo Ardoino, the boss of Tether, said his firm froze about $1.6 billion related to a potential Binance exchange hack. Jeremy Allaire, who runs cryptocurrency platform Circle, said his company had frozen more than $800 million in USDC.
Crypto Prices Tumble
Most major cryptocurrencies declined following news of the cyberattack, with stablecoins being an exception as they are designed to remain within narrow fluctuation ranges. Bitcoin and Ethereum each dropped by almost 5% and nearly 6%, respectively. Binance’s native token, BNB, fell by approximately 10%.
