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It’s the biggest cryptocurrency theft in history: Hackers from North Korea allegedly stole $6.36 billion in funds from Binance in the space of just 20 minutes, shocking customers and the financial industry.
The heist raises all kinds of questions about how this was allowed to happen, what might happen next, and whether Binance customers will get their stolen money back.
Even if you’ve never owned a cryptocurrency, there are also bigger questions – like what this means for global financial stability, and what the demand might be for everyone outside of the Binance world.
Looking for a quick five-minute primer on the Binance Hack? We spoke to industry experts to get some answers…
1. What actually happened?
The basics are now pretty clear – $6.36 billion worth of cryptocurrency was stolen from the Binance exchange in just 20 minutes. Security analysts point the blame at North Korea’s TraderTraitor hacking group, which has a history of this type of heist. What’s less clear is exactly how the hackers gained access. Early reports identified the compromised laptop of a Binance employee as a potential route, though it now appears that there is more to the story.
“A compromised laptop can explain where an attack started, but it alone doesn’t explain how billions of dollars can leave an exchange,” Pieter Arntz, researcher at cybersecurity firm Malwarebytes, told TechRadar. “The real question is what allows the initial foot to access withdrawal systems – and what security measures stop unauthorized transactions.”
“According to blockchain analysts, the attacker spent at least a day and a half preparing, including testing their tools on public blockchains where everyone could see,” Ben Bernstein, manager of cybersecurity consulting at Huntress, told TechRadar. “Then most of the $6.3 billion left the Binance wallet in about 20 minutes. This is common in attacks we investigate. The attacker does most of the work long before anything is stolen.”
2. Will anyone get their money back?
Binance has promised to reimburse customer losses through its backup and emergency funds, but in the meantime we see deposits and withdrawals on the platform frozen while the hack is investigated. It’s a warning that even the largest and most sophisticated exchanges can still be vulnerable.
“Binance says it will cover every cent,” said Nigel Green, CEO of the deVere Group, in a press release. “I hope so. The contingency fund is around $1.2 billion and the gap is several times bigger, so the rest has to come from the company’s own balance sheet. The market wants to see the numbers, and the new proof of reserves can’t come soon enough.”
“Long-term holders have been reminded, very expensively, why keys are kept offline matter. Crypto has spent years pushing back against heavy regulation, and many of those arguments were fair. This is harder to argue with. Platforms that hold billions of other people’s money need enforceable security standards. I expect that regulators in the United States, Europe and Asia will move faster after this week.
Meanwhile, the US Secret Service said in a statement that it is “working around the clock” with private sector partners “to identify, freeze, trace and recover funds” stolen from Binance.
3. What follow-up scams can appear?
Whether you are a Binance customer or not, you need to keep your wits about you in the coming days. It’s likely that scams that literally try to pay for the hack will start to appear – perhaps warning you that you need to request quick refunds, lock your account against a certain threat or go through a false verification process.
“Criminals regularly use large breaches as a hook for phishing campaigns,” Dray Agha, senior manager of tactical response at Huntress, told TechRadar. “Consumers should be highly suspicious of any email or message claiming to be from Binance offering urgent account recovery steps. You should only check your account status through the official application or website instead of clicking links in unsolicited messages.”
According to the team at Huntress, you should watch out for social media posts, emails and text messages that use the Binance hack as a hook – perhaps fake news suggesting that now is the time to buy crypto while prices are down.
As always, think twice about following links or entering sensitive information into online forms and portals that you are not familiar with.
4. How does this affect the average consumer?
If you don’t own any cryptocurrency, the good news is that you are largely unaffected by what happened here. There won’t be a stock market crash, or a run on the banks, or a global recession – not because of this hack, at least. However, it is always worth weighing your personal privacy and security configuration.
“If you don’t have crypto, the immediate impact on you is small,” Ben Bernstein of Huntress told us. “Your bank account and your card are not affected by this. The bigger takeaway for consumers is that attackers often target people rather than technology, through a convincing email, a fake login page or a call from someone posing as IT support,” he said.
“That makes security awareness everyone’s job, at home and at work. If you pause before clicking on a link, approving a login or sharing a code, you make it more difficult for an attacker, whether they are after your savings or your employer’s systems,” he added.
5. What does this mean for the future of money?
This clearly raises a lot of questions about the security of the cryptocurrency and the exchange it sits on – and of course it’s far from the first crypto heist we’ve seen. In the longer term, it may lead to less trust in crypto as a whole, but the experts we spoke to don’t think it will bring the industry down. What will be important is to ensure that the risks of this happening again are minimized as much as possible.
“Despite the scale of the theft, this is not a threat to global financial stability,” Feike Hacquebord, principal threat researcher at TrendAI, told TechRadar. “Around half of the stolen funds have already been frozen, while the regulated banking system is well equipped to absorb a shock of this magnitude. This is a major crisis for Binance, not a crisis for the global financial system.”
“The change I’d like to see for crypto companies, banks and any other business is working on the assumption that someone will eventually come in,” Ben Bernstein told us. “Keeping attackers out is important, but it’s not enough on its own. Companies also need someone to watch the clock, especially for login and account activity that doesn’t look right, so they can find an intruder and remove it before the money starts moving,” he added.
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