Hackers steal $6.3 billion from Binance in 20 minutes

Hackers stole 6.3 billion dollars worth of cryptocurrency from Binance in just 20 minutes on Thursday. The intrusion marks the largest cyber heist in history and has shaken confidence in the digital asset market.

The breach occurred at 4:05 p.m. Eastern. Cybercriminals accessed investor accounts on the platform and moved the stolen funds before security teams could intervene. Ari Redbord, global head of policy at TRM Labs, described the event as the largest bank robbery in human history. He noted that the thieves were able to move money at the speed of the internet, a feat that would be impossible in a physical bank robbery.

Experts believe the attack was executed by a sophisticated unit within the North Korean military. This group, often referred to as TraderTraitor, previously stole 1.5 billion dollars from the exchange Bybit last year. Redbord explained that North Korea has built the most advanced cyber capabilities in the world. He argued that this is not a commercial hacking job for profit alone, but an effort to fund weapons proliferation and other destabilizing activities.

Binance is currently working with other exchanges to recover the funds. The company has frozen approximately 3 billion dollars in stolen cryptocurrencies. This action prevents the hackers from taking full possession of the assets. Binance has also stated that it will pay back customers who lost money in the heist. However, the specific method for these repayments has not yet been detailed.

The incident has renewed debates about the safety of cryptocurrency exchanges. Critics argue that these platforms function differently from traditional financial institutions. Investors can trade digital currencies on these sites and leave the assets with the exchange for safekeeping. This dual role makes exchanges attractive targets for attackers. Unlike stock exchanges, crypto platforms do not always require the same level of regulatory oversight or insurance coverage.

Amanda Fischer, policy director and chief operating officer at Better Markets, compared the structure to the New York Stock Exchange. She explained that on traditional markets, investors keep their funds with regulated brokers that are audited by the Securities and Exchange Commission. These brokers also carry insurance to protect customers in the event of a cyber attack. Fischer stated that the regulatory framework for crypto is much weaker than what investors enjoy in other US markets.

The heist follows the collapse of FTX in 2022. That exchange dipped into customer funds to cover its own losses during a market downturn. Its founder, Sam Bankman-Fried, was later sentenced to 25 years in prison for fraud. Fischer warned that the temptation to use client funds can cascade into catastrophe for investors. She said that executives may tell themselves they will only use the money once, but the risk remains high.

Researchers say it is too early to determine if Binance had major security flaws. However, the speed of the hack highlights the sophistication of the attackers. Binance is not strictly bound by current regulations to pay back customers, although the company has promised to do so. Smaller exchanges may not have the same resources to cover such losses, leaving traders vulnerable if similar attacks occur elsewhere.