The world's largest cryptocurrency exchange, Binance, has lost $6.3bn (£4.7bn) in what many believe could be the biggest hack in the controversial currency's history. North Korea has been named as the most likely source behind the attack, as officials scramble to assess just how big the losses could be.
Reports say about half of the affected assets have been frozen, but the rest remain in the hackers' possession. Binance has confirmed that it will cover all losses.
What is Crypto and How Did the Hack Happen?
Crypto is a form of digital currency that exists solely online as data entries. It cannot be accessed as paper bills or coins. In the UK, crypto is largely unregulated, meaning it is not controlled by financial institutions such as central banks. Despite being an extremely volatile and risky investment, it remains popular with many people who believe it offers greater financial freedom and flexibility.
Binance CEO Richard Teng has revealed that initial investigations suggest the hackers gained access through a "compromised DevOps engineer's laptop", but they have now confirmed that there were also "additional points of breach". In a statement, Teng said the laptop "gave an attacker access to a service container, where they submitted unauthorised withdrawal transactions." He clarified that it was not a "one-click" action, explaining that it "involved a more complex attack process."
Could it Happen Again and Is Your Crypto Safe?
"A cyber attack of this level is a matter of if, not when especially alongside the rise of AI", says Andy Ward, CEO of SVP International at Absolute Security. "Cyber threats are becoming more sophisticated and widespread as ever, and it is likely only a matter of time before an even larger hack, with even greater financial fallout, makes headlines. It is essential that businesses are prioritising cyber resilience to minimise disruption and potential downtime. With threats evolving faster than ever, organisations must implement real-time visibility into their IT environments to identify vulnerabilities, and respond to these incidents when they occur."
For those who store their crypto with Binance, the company has declared that "your funds are safe", promising that Binance would cover all losses. The total impact is estimated to be around $6.3 billion, with around $3 billion frozen on-chain so far. In its statement, Binance assured users that its team "hasn't stopped". Teng stated: "We're working closely with law enforcement to ensure the matter is handled appropriately".
Market Impact and Scam Warnings
Bitcoin has dropped 5% in value since the hack, falling to £56,900. Representatives from other cybersecurity companies have issued warnings, telling people to stay on alert. Justas Pukys, Senior Product Manager at Surfshark, issued a statement urging people to stay on high alert for a possible second wave of scams, noting that "criminals could exploit the panic surrounding the incident to trick people into handing over their savings." Pukys also warned that scammers could pose as Binance representatives by "sending convincing emails or text messages warning that accounts are at risk or offering to help recover stolen funds."
He also warned that hackers could even claim to be from Binance's security team. His advice is as follows: "Anyone holding cryptocurrency should be extremely cautious of unexpected messages, particularly those urging immediate action. Never click links in unsolicited communications, share passwords or recovery phrases, or transfer funds at someone else's request. Instead, check for updates directly through the exchange's official app or website. Even those whose accounts are completely unaffected could become targets. The danger is that criminals could use fear of the original hack to steal money from people who were never at risk in the first place."
