Binance hacked: what the biggest crypto theft means for you

How it started

On Thursday, 29 October, attackers took crypto assets from Binance that the exchange itself puts at about 6.3 billion dollars. CoinDesk calls it the biggest hack in crypto history. According to the exchange's first explanation, the breach may have started with a compromised laptop of a DevOps engineer, and it says there is no evidence that wallet private keys leaked.

TRM Labs linked the attack to the TraderTraitor group the same night, and on Saturday, 31 October, the FBI confirmed that North Korea was behind the theft. The FBI asked crypto services to block transactions with addresses used to launder the stolen funds. The list included more than 600 Ethereum addresses and about twenty bitcoin addresses, and Chainalysis analysts expect tens of thousands in the coming weeks.

Who pays for the loss

Binance co-CEO Yi He said right away that the exchange would cover all losses from its SAFU protection fund and its own money. About 3 billion dollars was frozen almost immediately, mostly in the USDT and USDC stablecoins, whose issuers can block funds. By Saturday Binance said it had replenished 90 percent of what was stolen.

Users did not wait, though. In the 46 hours after the attack, 10.97 billion dollars was withdrawn from the exchange, and outflows exceeded inflows by 5.28 billion, according to data published by CEO Richard Teng. He says that by 3 November hourly deposits had again started to exceed withdrawals.

What happened to the price

On the day of the attack bitcoin fell 4.8 percent, below 77,000 dollars, and ether 5.7 percent. There was no recovery a week later: on Friday, 6 November, bitcoin stood at about 75,750 dollars, according to CoinDesk.

What it means for you

Crypto on an exchange is not the same as money in a bank. Bank deposits in Serbia are insured up to 50,000 euros; crypto is not. Whether you get your money back after an attack like this depends only on whether the exchange can and wants to cover the loss, as Binance has promised this time.

Serbia has applied the Law on Digital Assets since June 2021. Only companies licensed by the National Bank of Serbia may provide crypto services, and the NBS warns that providing them without a licence is a criminal offence. Before you trust anyone with your money, check whether they are in the register on the NBS website. This article is not investment advice: crypto prices can fall sharply and you can lose money.

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