The crypto world is reeling after a hacker drained billions of dollars from Binance, the world’s largest digital currency exchange, on Thursday. The full details of the hack are still emerging, but the broad strokes of what happened are becoming clearer, as everyone from security researchers to Elon Musk to the company itself weighs in with theories.
Binance posted on X late Thursday evening Eastern Time stating that a compromised developer laptop is likely to blame for the catastrophe, which is by far the biggest security incident in an industry that has been plagued by hacking since its earliest days. The company plans to provide more extensive details on Friday and, in the meantime, many other big crypto firms—including its biggest rivals—have rushed to aid Binance. Here is a detailed look at what we know so far about the nature and scope of the hack, and what is likely to happen next.
How did Binance get hacked?
Reports of a hack began surfacing on X early on Thursday afternoon. That’s when crypto observers, referring to public blockchain data, pointed to large amounts of currency moving out of wallets associated with Binance. Soon after, company founder Changpeng Zhao confirmed the hack.
In its post on Thursday evening, Binance stated the hacker appeared to have gained control of a laptop belonging to an employee or a contractor. The company wrote that the “initial investigation suggests that the security incident may involve a compromised DevOps engineer’s laptop, which allowed an attacker to gain access to a service container and submit unauthorized withdrawal transactions.”
How much did the hacker steal?
Reports on X have suggested the hacker made off with anywhere from $2 billion to $8 billion, but in its post, Binance said the estimated total impact sits at around $6.3 billion. The situation is still fluid and it could be days before the scope of the hack is finally determined.
What currencies did the hacker steal?
Early reports say the hacker took $1.5 billion in Bitcoin and around the same amount in the stablecoin Tether, and slightly under a billion dollars worth of Ethereum and the USDC stablecoin. It is likely the hacker stole various other currencies too.
Who is behind the hack?
No one has claimed responsibility for the hack and Binance has not pointed to a specific culprit, but the security firm TRM and others have said North Korea is almost certainly behind it.
This theory is highly plausible given that the North Korean military has long used crypto hacking to help fund its operations. The sophisticated nature of the hack, which included efforts to move the funds after they were stolen, is also consistent with the tactics of North Korea. For now, though, there is no definitive proof the country is responsible.
Are the funds gone for good?
Soon after news of the hack became public, Tether and Circle—the firms responsible for minting USDT and USDC—announced they would freeze any stablecoins tied to the hack.
While this is ostensibly good news, other reports indicate these efforts may only be partially successful at best. That’s because there is evidence the hacker immediately took the stolen funds to the online crypto lending platform Aave, and posted them as collateral for a loan in Ethereum. This means the hacker is now in a position to walk off with the borrowed Ethereum.
What has been the impact on the crypto markets?
Unsurprisingly, the price of all major cryptocurrencies fell upon news of the hack, though the drop was not dramatic. Bitcoin and Ethereum are down around 3% as of early Friday, but that drop also coincided with a sell-off in the broader financial markets.
The relatively muted reaction suggests the market is confident that Binance has deep enough pockets to absorb the loss while also keeping its customers whole.
What have been the reactions to the hack?
In the immediate wake of the hack, the CEOs of Coinbase, Tether and other big crypto companies all pledged to support Binance in its hour of need. In response, Binance’s founder noted that “many industry friends and even competitors (including some previously-not-so-friendly ones) provided very much needed help.” Zhao also expressed thanks to Yi He, the company’s current CEO, for pulling an all-nighter while she is pregnant.
Meanwhile, some on X expressed incredulity that Binance’s security could be so flawed as to allow a hacker to steal billions simply by gaining access to a single company laptop. As for Elon Musk, he chimed in with an AI-focused take, saying “Super intelligence agents will at some point do this to gain currency for themselves, not a human.”
This story was originally featured on Fortune.com
