Binance finishes covering US$6.3 billion of customer tokens stolen in hack

BINANCE said it has covered all of the US$6.3 billion in crypto-assets pilfered from customers, marking a capstone to the largest cybertheft in history.

The Oct 29 incident, which the US government and analysts have blamed on North Korea, involved not just common cryptocurrencies like Bitcoin, but more obscure tokens that took Binance more time to find and purchase. As of Thursday, the crypto exchange had restored all of them, according to a social-media post. 

“To our users and community: thank you for your patience and understanding,” Binance said in its X post.

Binance spent a mixture of its profits and other emergency funds to quickly restore most of the stolen tokens in a matter of days, but said a remaining 10 per cent would require more effort. It pledged throughout the process to completely cover lost funds.

Hackers used a maze of tools to launder the cryptocurrencies stolen from Binance, including transferring the tokens through thousands of digital wallets and across multiple blockchains in an effort to obscure their origins. The thieves used memecoins to launder a slice of the proceeds, allowing them to pass through about US$430,000 of the stolen crypto.

The automated nature of the transactions was also notable. Within a week of the hack, the laundering effort used more than 20,000 wallets and executed at least 65,000 transactions, according to blockchain-analytics firm Elliptic. That equates to roughly one new wallet being used every 30 seconds and one transaction completed every 10 seconds. Blockchain security firm Chainalysis also recently highlighted the role of Chinese money-laundering networks in cashing out the funds.

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The enormous cyberheist of the world’s largest crypto exchange came at a time when the digital-asset industry is pushing ever more into mainstream finance. It also highlighted the prevalence of cybersecurity challenges – especially since a key vulnerability appears to have been an engineer who got phished through a phony job offer.

Crypto exchanges Bitget and Bybit, as well as companies that helped keep tokens safe with physical hardware, such as Coinkite and Ledger, have all also experienced major incidents recently. BLOOMBERG