Binance $5.8 Billion Hack Triggers Crypto Market Crash. What Really Happened?
The world’s largest crypto exchange, Binance, has confirmed it was hacked, with multiple cryptocurrencies valued at between $2 billion and $5.8 billion drained.According to a forensic analysis of the event by security firm Blockaid, the attacker targeted two Binance hot wallets named “Binance 14” and “Binance 16”. They then siphoned multiple cryptocurrencies, including $1.6 billion in USDT, $62.6 million in RLUSD, $450 million in Ethereum , $800 million in USDC, 6.19 million Uniswap , and 2.26 million Chainlink . The funds were then directed to a newly created address that was recently funded through the privacy mixer Tornado Cash.Damage control At the moment, Binance security teams are actively investigating the attack. However, stablecoin issuers Tether and Circle have promptly frozen their respective assets in what is seen as a team action to protect the crypto industry. Tether CEO Paolo Ardoino confirmed that the firm froze over $1.56 billion in USDT, while Circle CEO Jeremy Allaire similarly announced the freeze of over $800 million in USDC.🙏🙏🙏 life saver Circle is closely tracking reports of a potential exploit involving Binance. In coordination with law enforcement, we have frozen more than 800M USDC associated with the incident and will continue supporting the investigation.DeFi lending giant Aave took similar action, freezing its lending markets to block the attacker from using the loot to borrow unfreezable assets.Meanwhile, Binance co-founder and major shareholder Changpeng Zhao (CZ) confirmed the safety of all user funds, while expressing appreciation for Tether and Circle’s quick actions.Our teams are aware of reports of a potential security issue and are actively investigating. User funds are completely safe.Our security teams are reviewing all relevant information with urgency, and we will provide updates through official Binance channels as soon as we have… Crypto’s biggest hack?By total loot valuation, the event marks the largest hack in the history of crypto, surpassing Bybit’s record of $1.5 billion.However, the fact that a considerable portion ($2.3 billion) of those proceeds were frozen almost immediately means the remaining unrecoverable amount is much lower (about $3.5 billion).The anatomy of the attack points to a hot wallet key compromise similar to the one that recently impacted Bitget, suggesting DPRK actors.Crypto market reaction At press time, 3.13% of the overall crypto market cap had been wiped out due to the Binance hack, bringing the remaining amount down to 2.63 trillion.Bitcoin slid 2.92%, losing the $81,000 hold and reclaiming $78,852. Ethereum moved in tandem, though losses were much higher (down 3.64% to trade at $2.272). The other impacted assets traded as follows:XRP down 6.03% to trade at $1.24BNB down 7.13% to trade at $702.54UNI down 13.19% to trade at $6.29LINK down 7.59% to trade at $10.92Ethena down 14.4% to trade at $0.18Pepe down 11.41% to trade at $0.054Aave down 10.4% to trade at $120.64