Binance Hit by $570 Million Blockchain Bridge Hack

Hackers have stolen $570 million from a blockchain linked to Binance. The largest crypto exchange has had to temporarily stop operations of the Binance Smart Chain after the exploit. Since the hack, Binance Coins (BNB) price has also fallen noticeably, with the token down 3.5% in the last 24 hours. At the time of writing, it trades for $281.

Attack on the Cross-Chain Bridge

According to Binance’s BNB Chain blog, hackers siphoned 2 million BNB tokens from the network on October 6, which is around $570 million in today’s prices.Binance co-founder and CEO Changpeng Zhao said the exploit was on a cross-chain bridge, the BSC Token Hub, which resulted in additional BNB tokens being created out of thin air. A cross-chain bridge allows users to transfer their digital assets from one blockchain to another. BSC Token Hub is a bridge between BNB Beacon Chain (BEP2) and BNB Chain (BEP20 or BSC). The exchange asked validators to temporarily suspend the network, and Zhao confirmed that users’ funds were safe.

Binance resumes operations of BSC

Binance has resumed operations of the BSC chain after releasing a software update that froze the hackers’ accounts. Operations resumed around 06:40 UTC. After the resolution, Zhao praised the BNB team, saying they handled the issue quickly and with transparency and responsibility. The team also released an update on the matter, saying that a new on-chain governance mechanism will be introduced on the BNB chain to combat future attacks.

There will also be governance votes to decide whether to freeze the hacked funds and whether to use BNB Auto-Burn to cover the remaining hacked funds. A governance vote will also decide whether to implement a White Hat program that will reward the discovery of bugs worth $1 million, as well as a bounty for chat hackers, up to 10% of recovered funds.

The bottom line

Hackers have been exploiting the crypto industry for years. Blockchain analytics firm Chainalysis published a report in August, which said the crypto market had lost $2 billion in 13 separate cross-chain bridge hacks in 2022.

The largest cryptocurrency hack to date was carried out in March 2022 and targeted the network supporting the popular Axie Infinity blockchain gaming platform. A recent attack was on the Nomad Bridge, where almost $200 million was stolen, while another prominent attack was the wormhole, which saw over $325 million stolen.Blockchain projects promise security, but back-to-back attacks are shattering this myth and investors’ confidence.