Binance is racing to contain the fallout from a massive cyberattack that hit around $6.3 billion in funds, with roughly half that amount frozen to prevent a huge theft.
The company, the world’s largest crypto exchange by daily trading volumes, said Friday it was working to resolve what it called a “complex attack.”
Investigations have “uncovered additional points of breach,” contrary to initial findings that suggested the hack 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 wrote on X.
The firm earlier posted a series of sometimes contradictory messages, insisting that “user funds are completely safe” but also saying it would “cover all losses.”
It confirmed on its Latin America X account that “the total estimated impact is around $6.3 billion.”
That is four times the amount affected in the biggest-ever cyberattack of its kind to date: $1.5 billion taken in February last year from the Bybit platform.
Binance warned the figure “may continue to increase as our teams work closely with law enforcement, issuers, blockchain intelligence firms and industry partners to trace and freeze additional assets.”
It said around $3 billion in affected assets had been frozen.
North Korea-Linked Group Suspected
The 2023 Bybit heist was attributed at the time to a group of hackers affiliated with North Korea called TraderTraitor.
Blockchain investigation firm TRM Labs said Thursday it had “high confidence” that the Binance hack was also orchestrated by TraderTraitor, citing “robust on and off-chain intelligence.”
“Several features of this attack match earlier North Korea-linked heists,” TRM said.
TraderTraitor is believed to be part of Lazarus Group, which gained notoriety in 2014 when it was accused of hacking into Sony Pictures as revenge for “The Interview,” a film that mocked North Korean leader Kim Jong Un.
Fund Freeze and Withdrawal Pause
At about 0900 GMT Friday, Binance said it was on track to resume withdrawals in 45 hours, after announcing earlier that all deposits and withdrawals had been “temporarily suspended.”
It said “deposits remain unaffected.”
The company had said on X that initial investigation suggested the hack involved a compromised laptop belonging to a “DevOps engineer,” allowing the unauthorised party to access a “service container” and execute unauthorised withdrawal transactions.
“We have found no evidence of any private key leaks from wallets,” it said, promising to share a detailed technical analysis once investigations were complete.
But it said later that “subsequent investigation has uncovered additional points of breach.”
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.
USDT and USDC are both “stablecoins,” or digital currencies whose value is linked to the US dollar.
Crypto Prices Tumble
For several hours before Binance confirmed the attack, industry observers said hackers had managed to reach the platform.
The prices of most major cryptocurrencies fell on news of the cyberattack, except for the stablecoins, which by definition can only fluctuate within tight margins.
Bitcoin and Ethereum plunged nearly 5% and nearly 6% respectively on the news. BNB, native to Binance, tumbled nearly 10%.
The attack comes as many observers express worries that the ever-expanding capabilities of artificial intelligence (AI) models could compromise cryptography and IT security protocols.
