Binance, the world's largest cryptocurrency exchange, has confirmed it is the target of an unprecedented cyberattack resulting in the theft of $6.3 billion (£4.7bn) in digital assets. Experts have identified North Korea as the likely culprit behind the breach, which stands as the biggest crypto heist in history. The company has urgently moved to freeze affected assets, successfully locating approximately $3 billion so far, though no update was provided regarding the remaining $3.3 billion.
Analysts from crypto analysis firms TRM and Chainalysis attributed the attack with high confidence to TraderTraitor, an elite hacking unit linked to the North Korean state. This incident follows a pattern of state-sponsored cybercrime; according to the FBI, North Korea was responsible for stealing approximately $1.5 billion from a Dubai-based exchange last year, which previously held the record for the largest crypto theft.
Binance co-founder Yi He stated that the company would cover all hacking losses, a sentiment echoed by co-CEO Richard Teng, who assured users that their money is safe. In an official statement, Binance announced that all deposits and withdrawals have been temporarily suspended as security teams work around the clock to secure wallet infrastructure and trace assets with support from law enforcement. An initial investigation suggests the breach may have originated from a hacked laptop belonging to one of the exchange's engineers, allowing unauthorized access to systems.
The financial markets reacted immediately during early Asian trading on Friday, with Bitcoin dropping more than 3% to a six-week low of $76,368. Industry experts warn that beyond the immediate asset loss, the breach could dampen risk appetite and prompt investors to reassess the safety of funds held on centralized exchanges. Bernardo Brites, CEO of Trace Finance, noted that countering such hacks is becoming increasingly difficult as AI identifies vulnerabilities faster than they can be patched.
Efforts to recover funds are underway with significant cooperation from other industry players. Tether froze nearly $1.57 billion in assets linked to the incident, while Circle froze more than $800 million. World Liberty Financial, a crypto company linked to Donald Trump and his family, reported working with custodian BitGo to freeze stolen funds. Binance's Yi He specified that $27 million in stablecoins and approximately $2 million worth of World Liberty tokens had been frozen.
Changpeng Zhao, the founder who stepped down as CEO in 2023 after pleading guilty to a felony related to money laundering failures, posted on X that user funds are safe. Although he no longer manages the company, he stated as a shareholder that he expects all user funds to be fully covered. Binance reiterated its commitment to tracing and recovering additional funds, expressing confidence that it will weather the storm.
The incident highlights ongoing vulnerabilities in the crypto sector, which saw $2.9 billion stolen across nearly 150 attacks last year according to TRM. Authorities have warned that organized crime groups are increasingly using cryptocurrencies to move funds outside traditional financial systems. While Binance.US stated it was not affected by the security incident, regulators in the UK, including the Financial Conduct Authority and the Bank of England, are monitoring the situation for potential fallout on the wider financial system. Coinbase also confirmed it was unaffected but is monitoring the developments.
Sources: The Guardian Technology.