Binance hack: The trail leads to North Korea
Hackers have stolen over six billion US dollars worth of digital currency from Binance, the world's largest cryptocurrency exchange. While the provider is compensating for almost the entire loss, it is not doing so immediately. The FBI suspects a North Korean hacker group.
After the biggest crypto hack in history, the cleanup work is beginning. First things first: since Sunday, you have been able to withdraw your assets again. But only gradually, depending on the currency. Crypto exchange Binance is initially releasing the major, high-demand currencies for trading. This includes Bitcoin, Ether, and Doge, as well as parts of the stablecoins USDT and USDC. Others are set to follow later.
Following the shock of the massive outflow and Binance's assurance to cover the losses, many investors wanted to secure their assets on the very first day. Around 3.6 billion US dollars flowed out of the platform on Sunday alone. According to Binance, this is only about two percent of all funds held on the exchange. The analytics service DefiLama contradicts this statement. Their report speaks of an outflow of approximately 5.81 billion US dollars. Today, Binance is expected to release documents disclosing the exchange's actual assets. This is intended to allow customers to verify whether their balances are fully covered.
How could this happen?
Initial investigations showed that the hackers prepared the operation for at least a day and a half. They struck on the evening of October 29 at 9 p.m. They gained access to the digital wallets that Binance normally uses to process customer withdrawals. They had these accounts transfer money to themselves. They siphoned off a large portion of the 6.3 billion in just 20 minutes.
It is currently not entirely clear how the perpetrators were able to gain access to the system. Binance assumes that it all started with a compromised employee laptop. It was not until the night that Binance confirmed the attack. At around 1:30 a.m., the exchange stopped all deposits and withdrawals. Initially, the company assured that all customer funds were safe. Later, they admitted that this was not the case, but that Binance would cover all damages.
Behind the scenes, a cinematic race for the money took place: part of the stolen money consisted of so-called stablecoins. These are cryptocurrencies pegged to the US dollar. The companies behind these currencies can freeze funds – which they did. They froze around three billion US dollars. Meanwhile, the hackers tried to exchange the money into other cryptocurrencies before it could be frozen. According to TRM Labs, 2.4 billion US dollars were lost in this way.
The incident also had an impact on the value of the currencies. Bitcoin briefly slipped below 77,000 US dollars, reaching its lowest level since mid-September.
Analysts and FBI point to North Korea
On the very first night, analysts at TRM Labs attributed the hack to the North Korean hacker group "TraderTraitor". On Saturday, the FBI confirmed the suspicion. Investigators observed the group exchanging the stolen money. The same group is said to have pulled off a coup in 2025: they allegedly stole 1.5 billion US dollars from the crypto exchange Bybit.
Source: Shutterstock
Binance reports today that 95 percent of the financial damage has already been replaced. To do this, the exchange bought back the coins with its own money from an emergency fund. The rest is expected to follow. They also intend to present a detailed report on the events once the investigation is complete.
I've been tinkering with digital networks ever since I found out how to activate both telephone channels on the ISDN card for greater bandwidth. As for the analogue variety, I've been doing that since I learned to talk. Though Winterthur is my adoptive home city, my heart still bleeds red and blue.
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