It’s happened again, folks. Another hack is in the books, but this one was not only large, but also unexpected. The victim this time around is Binance, the largest and most powerful digital currency trading platform in the world.
Binance Has Lost a Lot of Money
At the time of writing, the exchange has lost more than $600 million in a cyberattack. All the funds in question were in BNB, which stands for Binance Coin. It is the exchange’s native token. The exchange reported the hack in the middle of October and the event was instantly recorded and investigated by cyber security experts, one of which believes it occurred via tricking BSC Token Hub.
As a cryptocurrency bridge, Token Hub was cheated and “talked” into sending more than two million units of BNB to the hacker, which were worth more than $580 million at the time the event took place. However, it took more than a little convincing on the actor’s part to get his (or her) hands on the money. Rather, the individual took advantage of a bug in the system to establish arbitrary tokens out of thin air. They were then minted by the Binance network.
In a discussion regarding the hack, Binance CEO Changpeng Zhao explained:
An exploit on a cross-chain bridge, BSC Token Hub, resulted in extra BNB. We have asked all validators to temporarily suspend BSC. The issue is contained now. Your funds are safe. We apologize for the inconvenience and will provide further updates accordingly.
This isn’t the first time Binance has fallen victim to such malicious behavior. A few years ago, the company was subject to a hack that saw more than $40 million in bitcoin funds stolen overnight, though that was small when compared with the present circumstances. During the former event, the money was never recovered, and the company was required to cover all losses endured by customers. It is unclear what the trading platform will do this time around or if the money can be taken back.
Situations like this raise some serious questions, a big one being, “Why don’t large crypto enterprises like Binance have the security in place to prevent such massive attacks from occurring?” Another question is, “Should regulation be established to stop a hack of this nature from ever occurring again?”
Regulation May Be Problematic
That latter question has been making the rounds through the crypto space for some time, and it’s something of a two-sided coin (pardon the pun). For one thing, having regulation set in stone could prevent attacks and similar malicious events from taking precedence.
At the same time, crypto was designed to give financial independence to all who used it, and if regulation is put into play, that means third parties will be involved, and some of that independence could wind up disappearing.