Investing News

Binance Hit By $570 Million Blockchain Bridge Hack

Hackers have stolen $570 million from a blockchain linked with Binance. The largest crypto exchange has had to temporarily halt the operation of its Binance Smart Chain after the exploit. Since the hack, Binance Coin’s (BNB) price has also dropped noticeably, with the token down 3.5% in the last 24 hours. At the time of writing, it is trading at $281.

Key Takeaways

  • The BSC Token Hub, a cross-chain bridge, was exploited on October 6, with hackers draining $570 million.
  • Binance halted the Binance Smart Chain and managed to freeze $7 million in funds after pushing an update that froze the accounts. 
  • The price of the BNB token took a hit, going down by 3.5% over the past 24 hours.

Attack on Cross-Chain Bridge

According to Binance’s BNB Chain blog, hackers drained 2 million BNB tokens from the network on October 6, which is about $570 million at current prices.Binance co-founder and CEO Changpeng Zhao said that the exploit was on a cross-chain bridge, BSC Token Hub, which resulted in extra BNB tokens being created out of thin air. A cross-chain bridge lets users port their digital assets from one blockchain to another. The BSC Token Hub is a bridge between the BNB Beacon Chain (BEP2) and the 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 restarted at around 06:40 UTC. Following the resolution, Zhao praised the BNB team, saying that they handled the issue quickly and with transparency and responsibility. The team also posted an update on the matter, saying that a new on-chain governance mechanism would be introduced on the BNB chain to combat future attacks.

There will also be governance votes to determine 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 a white hat program that will reward the discovery of bugs to the tune of $1 million should be implemented, as well as a bounty for chatting hackers, up to 10% of the recovered funds.

The Bottom Line

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

The largest cryptocurrency hack to date was conducted in March 2022 and targeted the network that supports the popular Axie Infinity blockchain gaming platform. One recent attack was on the Nomad Bridge, which saw nearly $200 million stolen, with another prominent one being the Wormhole exploit, which saw over $325 million stolen.Blockchain projects promise security, but back-to-back attacks shatter this myth and investors’ confidence.