Inside the scramble to contain the largest crypto heist in history - SMH.com.au

The biggest crypto hack in history began with a rehearsal. As trading hummed along on Binance, hackers quietly ran sequences of code on accounts they controlled on the Ethereum blockchain, testing a program designed to seize control of the exchange's accounts. Just after 4pm (New York time) on Thursday, they attacked, draining more than $US6 billion ($8.9 billion) from wallets across at least four different blockchains.

From New York to Abu Dhabi and Kyiv, security researchers and Binance executives scrambled to trace the stolen money, freeze accounts and understand how the attackers had breached the exchange. "It's the largest bank robbery in human history," said Ari Redbord, global head of policy and government affairs at TRM Labs, a blockchain analytics firm.

Industry Response

The crypto industry is no stranger to attacks, but the scale of this breach shocked even veterans. Just as the exploit was unleashed, Taylor Monahan, a researcher at SEAL, was alerted to strange transactions at Binance. "In our souls, we knew it was a hack," she said. Within minutes, Tether and Circle began freezing transactions on their blockchains.

Binance's Response

Binance co-founder and co-CEO Yi He was alerted to the trouble by posts on X while at home in Abu Dhabi. Within minutes, the company created a war room that swelled to about 100 people worldwide. At 5.15pm (New York time), Binance publicly acknowledged it was investigating a "potential security issue."

Circle and Tether quickly announced they had frozen more than $US800 million and $US1.5 billion respectively, "related to a potential Binance exchange hack." Competitors including Kraken, Coinbase and Bybit quickly proclaimed they were unharmed.

Attribution and Impact

Blockchain intelligence firms TRM Labs, Chainalysis and Elliptic all blamed North Korea for the heist, noting that stolen funds commingled with crypto seized in the Bitget hack, which researchers had already attributed to the Democratic People's Republic of Korea. The FBI also blamed North Korea for the hack.

Chainalysis labelled the hack as "the largest in the history of crypto, and one of the single-largest financial crimes of all time." The attack comes at an inopportune time for an industry gaining unprecedented support from the US government, which is pushing for mainstream adoption of cryptocurrencies.

Aftermath

Yi He promised Binance would continue working with law enforcement to find the attackers and vowed to reimburse any users who lost funds. "We won't let the hackers take away the momentum this industry deserves," she said. On Saturday, the company said it had restored 90% of the stolen tokens, pledging to reinstate customers' ability to withdraw funds the following day.

While the industry scrambled to contain the damage, some traders found opportunity. Morten Christensen, a cryptocurrency trader, made tens of thousands of dollars by shorting cryptocurrencies that were dropping in value following the hack announcement. "Binance got hacked, babe," he told his wife. "Need to lock in."