Binance crypto exchange's $6.3 bn heist rattles crypto, draws scrutiny

The US agencies are coordinating with private-sector partners to assess the breach and recover stolen funds, while Binance pledged to cover all losses

By Myles Miller, Emily Nicolle and Scott Patterson

 

US law enforcement joined the hunt for hackers who drained more than $6 billion from the Binance crypto exchange in the biggest cyber theft ever recorded. 

The Federal Bureau of Investigation is aware of the incident and is coordinating with its partners “to understand the scope of the activity, evaluate potential impacts, and coordinate appropriate investigative steps,” the agency said in a statement to Bloomberg News on Friday. Secret Service investigators are also “working around the clock” with the private sector to recover stolen funds, a spokesperson said.

 

The Justice Department is aware of reports about the attack but does not comment on investigations, a spokesperson said. 

 

 

While the full details of the Binance breach have yet to emerge, the incident comes amid growing concern about the risks posed by hackers in the age of artificial intelligence. Other recent cyberattacks have hit prediction market Polymarket, South Korean financial firms Mirae Asset Global Investments Co. and Daishin Securities, as well as Japanese currency trading platform GMO Internet Group Inc.

 

The world’s largest crypto trading platform suspended withdrawals and pledged to cover all losses. The exchange is able to do so as a result of its ongoing investment of revenue into cryptocurrencies, Binance co-Chief Executive Officer Richard Teng said in a video posted on social media on Friday. Yi He, who is co-CEO, said Binance’s revenue for this year would completely cover the amount lost. Withdrawals were expected to resume by Sunday.

 

“Most of what we earn from day-to-day operations is held in cryptoassets,” Teng said. “That is precisely why we are able to absorb a loss of this size, immediately, with our own money.”   

Americans are prohibited from using the exchange. Binance.US is a smaller, separate entity. 

 

The hack comes at a time when the Trump administration and its regulators have been pushing for mainstream adoption of cryptocurrencies and blockchain technology. In September, the Securities and Exchange Commission approved the so-called Innovation Exemption, which allows for public company stocks to trade on blockchains. The Binance hack is likely to raise concerns among public company executives about adopting such technology, experts said.

 

The Commodity Futures Trading Commission, for its part, recently unveiled a proposal to regulate digital asset transactions and markets. If finalized, the measure would regulate leveraged crypto trades offered to retail customers and establish a new category for crypto exchanges offering the leveraged trades to register with the agency.

 

“There need to be delays and checkpoints” in transactions, said Austin Campbell, a crypto expert and former banker who is now an adjunct professor at the NYU Stern School of Business, drawing an analogy to automobile safety. “The car can be faster, cheaper and more gas efficient if we take out all the airbags and seatbelts,” he said.      

 

Blockchain intelligence firms TRM Labs, Chainalysis and Elliptic have all pointed to North Korea as being behind the Binance heist, with Chainalysis labeling the incident as “the largest in the history of crypto, and one of the single-largest financial crimes of all time.” The funds drained in the attack were a mix of the largest cryptocurrencies, including Bitcoin, Ether, and the dollar-backed stablecoins USDT and USDC.

 

Bitcoin fell on news of the Binance attack, dropping below $77,000 for the first time in more than a month. The largest currency traded near the lows of the day for much of Friday.  

 

For the crypto faithful who’d been basking in a two-month-long price rebound, the Binance incident has cast a shadow over the recovery.

 

Binance dwarfs its industry rivals. It holds roughly $135.2 billion in assets, compared with $28.6 billion at the second-largest exchange OKX, according to DefiLlama data.  

 

Binance said the incident may involve a compromised software engineer’s laptop, as well as “additional points of breach.” It found no evidence of leaked private keys, it said.

 

“This was a complex attack, and we are doing all we can in coordination with law enforcement to resolve it,” Binance said in a post on X.

 

An emergency insurance and reserve fund from Binance called the Secure Asset Fund for Users (SAFU) was established in 2018 to serve as a backstop for customers in “extreme situations,” according to the exchange. The SAFU is generally maintained at around $1 billion, but has fluctuated in the past in tandem with market movements, Binance said in 2024.

 

The two biggest stablecoin issuers said they took steps to freeze affected currency. Paolo Ardoino, the chief executive officer of Tether, said in an X post that it froze more than $1.5 billion of the stablecoin USDT “related to a potential Binance exchange hack.” Jeremy Allaire, who runs Circle Internet Group Inc., said $800 million of its USDC token had been frozen amid “reports of a potential exploit involving Binance.”