Binance Halts Withdrawals After Record $6.3 Billion Crypto Heist
Seven Lights
Binance halted withdrawals after the exchange’s founder said approximately $6.3 billion had been taken in what is being described as the largest cryptocurrency heist on record. The Financial Times reported the suspension of withdrawals under the headline “Binance halts withdrawals after record $6.3bn heist,” and Forbes reported that the company said $6.3 billion was impacted and that it had suspended withdrawals.
The exchange’s founder said the company may have been the victim of the biggest crypto heist ever, the Wall Street Journal reported. Fortune, publishing an account of what is known so far, called it the biggest crypto heist in history. Bloomberg’s markets programme led its coverage the same morning under the heading “Crypto Rocked by Biggest Heist on Record.”
Prices of digital assets fell as the news spread. Bitcoin changed hands at $78,398, down 1.79 per cent; Ethereum fell 2.61 per cent to $2,248.87; XRP lost 2.29 per cent to $1.26; and Dogecoin slipped 2.17 per cent to $0.08, according to Fortune’s market data. The declines were broad rather than confined to tokens tied to the exchange, an indication that traders read the theft as a fresh warning about the security of large crypto platforms.
Details of how the funds were taken, and where they went, had not been made public. The halt on withdrawals is the industry’s standard emergency measure, intended to stop a run on the exchange while the loss is traced and accounted for. What remains is the question of whether Binance can cover customer balances, and how much of the stolen value can be recovered.
The sum exceeds any previous loss in the industry’s chronicle of breaches and exchange failures. Investigators, auditors and regulators were expected to spend days establishing the method of the theft and the path of the funds. Until that accounting is complete, the exchange’s customers can move nothing out.
Update, Oct. 31: Blockchain-intelligence firms identified North Korea as the likely culprit. TRM, a crypto analysis firm, attributed the attack “with high confidence” to TraderTraitor, North Korea’s elite hacking unit, and the research outfits Elliptic and Chainalysis reached the same conclusion, NPR and The Guardian reported. “This is almost certainly the largest theft of any kind in history,” said Tom Robinson, chief scientist at Elliptic. Binance said an initial investigation suggested the breach may have begun with a hacked laptop belonging to one of its engineers, which let an attacker gain access to its systems and make unauthorised withdrawals. The exchange said it would cover customer losses, and about $3 billion of the affected assets had been located, with the stablecoin issuers Circle and Tether freezing funds. Binance said it planned to resume withdrawals over the weekend.
Update, Nov. 1: Binance said in a security update on Saturday that it had replenished 90 per cent of the stolen assets and was committed to covering the remaining 10 per cent. About $3 billion of the funds has been frozen, and more than $2.5 billion of the $6.3 billion was taken in a single transaction. The company said an engineer’s compromised laptop and “additional points of breach” gave the attackers access to internal systems, where Binance’s own systems were made to sign the transactions. Tom Robinson of Elliptic called it “almost certainly the largest theft of any kind in history”; TRM Labs, Elliptic and Chainalysis attributed the attack to TraderTraitor, North Korea’s elite hacking unit. North Korea has a history of crypto theft, including the raid on a Dubai-based exchange worth about $1.5 billion last year, the FBI said.