Hackers steal $6.3 billion from Binance in largest crypto heist

Investors who kept digital assets on the world's largest cryptocurrency exchange lost funds worth more than $6 billion in a single attack. The breach occurred at 4:05 p.m. Eastern on Thursday, when cybercriminals accessed investor trading accounts. Within 20 minutes, the hackers moved just over $6.3 billion in cryptocurrency out of the platform. This event stands as the largest cyber heist in history.

Ari Redbord, global head of policy at crypto research firm TRM Labs, described the incident as the largest bank robbery in human history. He compared the event to a thief walking out of a physical bank with billions in cash and moving the money at the speed of the internet. Redbord noted that the speed and sophistication of the theft mark a new era for digital asset security.

The FBI confirmed on Saturday that North Korea was behind the hack. The agency stated that a unit known as TraderTraitor conducted the attack. This military hacking group is also responsible for the previous largest cyber heist, which involved stealing $1.5 billion from the Bybit exchange last year. Redbord said the unit uses its cyber capabilities for weapons proliferation and other destabilizing activities, rather than just for commercial gain.

The FBI reported that TraderTraitor actors are converting the stolen assets primarily into Ethereum. The agency expects the hackers will use decentralized finance services and instant swap tools to further launder the money. Binance has worked with partners to freeze about $3 billion of the stolen cryptocurrency. This action prevents the hackers from taking full possession of the digital assets.

Binance has promised to pay back customers who lost funds in the attack. The exchange has not yet specified the exact method it will use to return the money. Amanda Fischer, policy director at financial consumer advocacy group Better Markets, pointed out that current regulations do not necessarily bind crypto exchanges to such reimbursements. She noted that smaller exchanges might struggle to make investors whole after a similar breach.

Critics argue that the structure of crypto exchanges creates unique risks. Users can trade digital currencies and leave them in custody with the platform. This dual trust makes exchanges attractive targets for hackers. Fischer explained that traditional stock exchanges do not hold customer funds. Instead, brokers manage the money and are subject to audits, regulation, and insurance requirements by the Securities and Exchange Commission.

The regulatory framework for cryptocurrency remains weaker than that of traditional U.S. markets. Fischer warned that this gap leaves investors vulnerable. She cited the 2022 collapse of FTX as a cautionary example. FTX, then the largest crypto exchange, used customer funds to cover its own losses during financial trouble. Its founder, Sam Bankman-Fried, was sentenced to 25 years in prison for fraud. Fischer said that the temptation to use client funds to cover losses can cascade into catastrophe for investors.