Binance $570 million crypto hack ‘will prolong crypto winter,’ expert says

The bulwark of security around cryptocurrencies is under attack, as crypto hackers continue to compromise firms and make off with large amounts of cash.

Binance, the world’s largest cryptocurrency exchange, announced on Thursday that it had been compromised by hackers. The hackers stole two million BNB tokens, estimated to be worth around $570 million, according to CNBC.

The firm temporarily suspended its blockchain network after a cross-chain bridge connected to the BNB chain was targeted. Cross-chain bridges are used to transfer tokens from one blockchain to another.

“Cross-chain bridge design remains a technical challenge, with variations across exchanges being attractive targets for hackers,” said Suneet Muru, analyst at GlobalData Verdict. “The Binance hack is likely to prolong the so-called crypto winter.

“But it could also serve as a wake-up call in the long run for exchanges to self-audit their code so that safer, more robust smart contracts can become the basis for future development.”

Oded Vanunu, head of product vulnerability research at cybersecurity firm Check Point, said Verdict that hackers up the game.

“Hacking groups have made great efforts over the past year to hack these ‘injection points’ that connect networks and look for vulnerabilities mainly in smart contracts and platforms such as bridges,” Vanunu said.

“When hackers manage to exploit vulnerabilities on the platforms or on the ecosystem, they have direct access in the context of the blockchain networks.”

Katharine Wooller, MD at the crypto wealth platform, told Dacxi Verdict that Binance’s poor relationship with global regulators doesn’t help.

“[There will be] more government oversight of both stablecoins and custody arrangements, says Wooller.

“Crypto enthusiasts should do ample due diligence on the exchange they use (regulator they are responsible for) and how their digital assets are stored and insured.”

This follows the US Securities and Exchange Commission (SEC) charging Russian Forsage founders with crypto fraud in August. Verdict reported that retail investors collected as much as $300 million through the alleged Ponzi scheme.

GlobalData is the parent company of Verdict and its sister publications.