‘Biggest hack in history’: 5 things you should know about the $6.3 billion Binance heist, even if you don’t own cryptocurrency
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It is the largest cryptocurrency theft in history: North Korean hackers allegedly stole $6.36 billion in funds from Binance in just 20 minutes, leaving customers reeling and the financial industry in shock.
The heist raises all sorts of questions about how this was allowed to happen, what could happen next, and whether Binance customers will get their stolen money back.
Even if you’ve never held any cryptocurrency before, there are also bigger questions, like what this means for global financial stability and what the consequences could be for everyone outside the Binance world.
Looking for a quick five-minute introduction to the Binance hack? We’ve been talking to industry experts to get some answers…
1. What really happened?
The basics are now pretty clear: $6.36 billion worth of cryptocurrency was stolen from the Binance exchange in the space of just 20 minutes. Security analysts blame North Korea’s TraderTraitor hacking group, which has a history of such heists. What’s less clear is exactly how the hackers gained access. Early reports identified a Binance employee’s compromised laptop as a possible means of entry, although it now appears there is more to the story.
“A compromised laptop may explain where an attack started, but it doesn’t explain, on its own, how billions of dollars could come out of an exchange,” Pieter Arntz, a researcher at cybersecurity firm Malwarebytes, told TechRadar. “The real question is what allowed that initial foothold to become access to withdrawal systems and what safeguards failed to stop unauthorized transactions.”
“According to blockchain analysts, the attacker spent at least a day and a half preparing, including testing his tools on public blockchains where anyone could see,” Ben Bernstein, manager of cybersecurity advisors at Huntress, told TechRadar. “Then most of the $6.3 billion left Binance wallets in about 20 minutes. That’s common in the 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 refund customer losses through its backup and emergency funds, but in the meantime we are seeing deposits and withdrawals frozen on the platform while the hack is investigated. It is a warning that even the largest and most sophisticated exchanges may remain vulnerable.
“Binance says it will cover every penny,” said Nigel Green, CEO of the deVere Group, in a press release. “I hope so. The emergency fund amounts to about $1.2 billion and the deficit is several times larger, so the rest has to come from the company’s own balance sheet. The market will want to see the numbers and new proof of reserves will not be long in coming.”
“Long-term holders have just been reminded, in a very costly way, why keys held offline are important. Cryptocurrencies have spent years fighting heavy regulation, and many of those arguments were fair. This one is harder to argue. Platforms that hold billions of other people’s money need enforceable security standards. I expect regulators in the US, Europe and Asia will likely act more quickly after this week,” he added.
Meanwhile, the US Secret Service has said in a statement that it is “working around the clock” with private sector partners “to identify, freeze, trace and recover funds” that have been stolen from Binance.
3. What subsequent scams could appear?
Whether you are a Binance customer or not, you should stay alert over the next few days. Scams are likely to start appearing that try to literally cash in on the hack, perhaps by warning you that you need to claim refunds quickly, lock your account against a particular threat, or go through a fake verification process.
“Criminals routinely use major breaches as a hook for phishing campaigns,” Dray Agha, senior director of tactical response at Huntress, told TechRadar. “Consumers should be very suspicious of any email or message claiming to be from Binance and offering urgent steps to recover the account. You should only check the status of your account through the official app or website rather than clicking on links in unsolicited messages.”
According to the Huntress team, you should be on the lookout 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 cryptocurrencies, while prices are low.
As always, think twice before 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 what happened here won’t affect you much. There is not going to be a stock market crash, nor a bank run, nor a global recession, at least not because of this hack. However, it’s always worth weighing your personal privacy and security settings.
“If you don’t own cryptocurrency, the direct impact on you is small,” Ben Bernstein of Huntress told us. “Your bank account and card are not affected by this. The most important takeaway for consumers is that attackers often get in by targeting people rather than technology, through a convincing email, a fake login page, or a phone 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 a link, approving a login, or sharing a code, you’re making it harder for an attacker, whether they’re 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 cryptocurrencies and the exchanges they are on, and of course, it’s far from the first cryptocurrency theft we’ve seen. In the long term, it may lead to less trust in cryptocurrencies as a whole, but the experts we spoke to don’t think this will bring down the industry. The important thing will be to ensure that the risks of this happening again are minimized as much as possible.
“Despite the magnitude of the theft, this is not a threat to global financial stability,” Feike Hacquebord, senior threat researcher at TrendAI, told TechRadar. “Approximately 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 would like to see, for crypto companies, banks and any other business, is to work under 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. Businesses also need someone to keep an eye on them 24 hours a day, especially for logins and account activity that don’t look right, so they can find and take down an intruder before money starts moving,” he added.
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