BINANCE SAYS $6.3BN IN FUNDS HIT BY COMPLEX CYBERATTACK, $3BN FROZEN
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Agency Report
Cryptocurrency exchange Binance says it is working with law enforcement agencies to resolve a “complex attack” that affected an estimated $6.3bn in funds, with about $3bn frozen to prevent further losses.
The company, the world’s largest cryptocurrency exchange by daily trading volume, said investigations had uncovered additional points of breach, contradicting initial findings that suggested the attack involved a single compromised laptop.
“This was a complex attack, and we are doing all we can in coordination with law enforcement to resolve it,” Binance said in a post on X.
The company’s Latin America account confirmed that the estimated financial impact was about $6.3bn, adding that the figure could rise as investigations continued.
Binance said it was working with law enforcement agencies, cryptocurrency issuers, blockchain intelligence firms and industry partners to trace and freeze additional assets.
The estimated impact is more than four times the $1.5bn reportedly stolen from cryptocurrency platform Bybit in February last year, in what was described as the largest cyberattack of its kind at the time.
Blockchain investigation firm TRM Labs said on Thursday that it had “high confidence” that the Binance attack was orchestrated by TraderTraitor, a group affiliated with North Korea, citing what it described as robust on-chain and off-chain intelligence.
“Several features of this attack match earlier North Korea-linked heists,” TRM said.
TraderTraitor is believed to be part of the Lazarus Group, which gained notoriety in 2014 after being accused of hacking Sony Pictures in retaliation for the film The Interview, which mocked North Korean leader Kim Jong Un.
Binance initially issued a series of statements assuring users that their funds were safe, while also promising to cover all losses arising from the incident.
The company said its initial investigation suggested that the attack involved a compromised laptop belonging to a DevOps engineer, which allegedly allowed an unauthorised party to access a service container and execute unauthorised withdrawal transactions.
It maintained that there was no evidence of private key leaks from its wallets and promised to release a detailed technical analysis after the investigation.
However, the company later disclosed that further investigations had uncovered additional points of breach.
Binance also temporarily suspended deposits and withdrawals, although it said deposits remained unaffected. By 9am GMT on Friday, the company said it was on course to resume withdrawals within 45 hours.
Meanwhile, cryptocurrency issuers Tether and Circle disclosed that they had frozen assets linked to the incident.
Tether Chief Executive Officer, Paolo Ardoino, said his company had frozen about $1.6bn related to a potential Binance exchange hack.
Jeremy Allaire, who heads Circle, said the company had frozen more than $800m in USDC.
USDT and USDC are stablecoins, digital currencies designed to maintain a relatively stable value by being pegged to traditional currencies, particularly the US dollar.
The United States Department of Justice and the Federal Bureau of Investigation did not immediately respond to requests for comment.
Industry observers had raised concerns about a possible breach of the platform hours before Binance confirmed the attack.
Following the news, prices of most major cryptocurrencies fell, while stablecoins largely maintained their value.
Bitcoin and Ethereum dropped by nearly five per cent and six per cent, respectively, while BNB, Binance’s native cryptocurrency, fell by almost 10 per cent.
The incident comes amid growing concerns among industry observers about whether the expanding capabilities of artificial intelligence models could expose vulnerabilities in cryptography and information technology security systems.
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