Crypto ‘scammers on overdrive’ as Binance customers pull billions from accounts after $6.3bn hack – business live
The cryptocurrency exchange Binance froze withdrawals after a $6.3bn theft, the largest in history, and customers have since pulled billions from the platform.
The world’s largest cryptocurrency exchange has begun a phased reopening of withdrawals after a record-breaking $6.3bn theft. The platform froze accounts on Thursday to investigate the breach, which has been identified as the largest heist in the history of the industry.
Changpeng Zhao, the founder of Binance, has warned that scammers are now targeting customers who are trying to pull their funds from the platform. He posted on X that scammers are operating on overdrive.
Scammers on over drive now. Be careful.
Massive withdrawals and market impact
By Sunday afternoon, Binance had processed $4.6bn in withdrawals and $1bn in deposits, resulting in a net outflow of approximately $3.6bn. This represents 2.1% of the platform's total assets under management, which stood at $171bn.
The hack has spooked the broader market, with investors pulling funds from US spot Bitcoin ETFs. On Friday, the first trading session following the hack, these funds recorded $643m in net outflows.
US spot Bitcoin ETFs recorded $643 million in net outflows on Friday, their first trading session following the hack. BlackRock’s IBIT saw $233.7 million in outflows, while Fidelity’s FBTC lost $201 million, ARKB $129.5 million, GBTC $53.3 million and BITB $25.7 million. No fund recorded net inflows.
The market's reaction has also been evident in options trading. In the first 12 hours following the hack, put options accounted for 68% of Bitcoin options premiums traded, compared with 43% in the preceding five days.
Trading activity has remained elevated, with approximately $55m in daily Bitcoin options volume since the hack, compared with $34m the day prior. Traders have been moving quickly to protect themselves against further losses, with downside protection taking a much larger share of options activity.
Regulators respond to the hack
Financial regulators around the world are meeting with crypto exchanges to discuss their cybersecurity measures in response to the incident. South Korea’s financial regulator held an emergency meeting on Monday to inspect local exchanges' cybersecurity.
The regulator ordered various measures that could be implemented immediately, including constant transaction monitoring and operating response systems to detect and report irregular access attempts. Other measures include raising the ratio of cold wallets, which secure cryptocurrency private keys offline, and increasing their reserve deposits.
Our team is working with leading cybersecurity experts to investigate this activity and harden our systems. We’ve proactively notified all of our customers and will keep them updated as our work progresses. This security incident is not related to the recent crypto theft at Binance.
In Hong Kong, the Securities and Futures Commission is expected to step up guidance to the crypto industry soon via new circulars. Executive director for intermediaries Eric Yip said at Hong Kong’s FinTech week forum that new guidance will be coming in the last two months of the year.
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