Binance Hit By Record $6.3 Bn Crypto Breach, Suspends Withdrawals

Cryptocurrency exchange Binance confirmed a significant security breach resulting in an estimated $6.3 billion in lost assets, marking the largest crypto heist on record. The exchange alerted customers that it had worked with blockchain partners to freeze $3 billion on-chain. Binance subsequently suspended withdrawals while conducting security assessments and revoked affected address authorisations.

They engaged law enforcement and blockchain intelligence firms to track and recover the stolen funds. Binance stated they would cover all losses using their Secure Asset Fund for Users (SAFU) and company reserves. The exchange also intends to release an updated proof of reserves following remediation. Initial investigations point to a compromised laptop belonging to a DevOps engineer, which may have enabled an attacker to access a service container and submit unauthorized withdrawal transactions.

No evidence suggests wallet private keys were leaked. Binance anticipates resuming withdrawals within the next 48 hours. Among the affected assets were Bitcoin, Ether, Tether's USDT, Circle's USDC, and TRON. According to Watcher.Guru, Bitcoin outflows alone amounted to approximately $1.45 billion. Binance cofounder Changpeng Zhao noted that Tether froze approximately $971 million and Circle froze around $823 million.

However, experts claim, based on on-chain data, that the hacker deposited the stolen assets on decentralised liquidity platform Aave before freezing, allowing them to borrow Ether. Stablecoins like USDT and USDC can be frozen due to centralised control, while Ether, being more decentralised, cannot be frozen on-chain. Aave has temporarily suspended new deposits and borrowing in its V3 and V4 lending markets.

The breach affected Binance, the world's largest cryptocurrency trading platform, with a substantial presence in India. Following the incident, the Indian exchange CoinDCX paused new trades on its futures desk as a precautionary measure. Meanwhile, the Enforcement Directorate (ED) initiated investigations into alleged unauthorized cross-border crypto transfers exceeding ₹4.94 crore involving Mudrex, Saber.money, the decentralised finance protocol Instadapp, and its associated platform Fluid.