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www.wsj.com Behind the Scenes of Crypto’s Biggest Nightmare: a Record-Breaking Cyber Heist Binance’s founder Changpeng Zhao had warned a week earlier that “No crypto wallet is 100% safe.” In 20 minutes, hackers had made off with at least $6.3 billion. TRANSCRIPT:View quoted post on X
Hi everyone, firstly, I want to thank you all for the support. Difficult times like these are a great reminder how strong our industry is when we work together.
We are grateful to our partners that acted quickly to freeze the hacked assets; to global law enforcement, who we’re working hand in hand with to seek justice;
But most of all - we are grateful to our users for their patience and understanding.
Rest assured that we are working non-stop to resolve this, to make the users whole, and live up to your trust.
I want to be clear: WE ARE COMMITTED TO COVERING ALL HACKED LOSSES THROUGH OUR COMPANY FUNDS. Your assets are safe.
The good news is that we are recovering stolen assets for users.
Binance has reserved over $6.34B of company funds to cover the stolen assets. $5B of these funds are already held in the exact token assets that were impacted, such as USDC, USDT, BTC, ETH, BNB etc.
I know many of you are still asking the same question: how can Binance actually prove that your assets were not affected?
Let me be direct about the first point. We NEVER use any customer funds, so they are not impacted. What was affected in this incident was Binance's own hot wallet. User assets are held under Binance's established security architecture. The vast majority sit in cold wallets, and are only moved into a hot wallet when a user makes a withdrawal.
One more thing I want to share. Binance has always been built for the long term. Most of what we earn from day-to-day operations is held in crypto assets. We have kept a lot of them in the company, and reinvested them — into the business, and into security. Because we believe in crypto, and in the long-term value of this industry.
That is precisely why we are able to absorb a loss of this size, immediately, with our own money.
We are working on the outstanding amount by buying the token assets through market and OTC channels. We will share more progress as soon as we can.
If you, as a user, are concerned, we encourage you to check funds on your Binance accounts. Wait for our initial Proof of Reserve for public verification, which is targeting Monday. You can reach out to our customer service with any questions.
Next, I want to give you an update on our understanding of the hack itself.
Our tech and security teams are still deep in the investigations of the hack.
This was not carried out by one person. Our initial investigation suggested that the security incident may have involved a compromised laptop, however our subsequent investigation has uncovered additional points of breach.
This was a complex attack. The attacker also used a self-destruct mechanism that destroyed tooling and traces as they went, making it more difficult for us to trace and investigate.
The attacker used a known multi-signature protocol EIP-7702, to obtain on-chain execution approval over a hot wallet. That delegation did not pass through our normal approval controls. That’s why we need to pause the withdrawal service to investigate, rebuild, and retest the entire infrastructure system.
So what are we doing now?
First, we are rebuilding the withdrawal service, and we are not switching it back on until it passes rigorous testing. We are very hopeful that users will be able to withdraw prior to our Sunday deadline, which is on track to be within 40 hours.
Second, we are conducting a full security review across the entire company — endpoints, cloud, key management, signing. Everything.
Third, we are completing the purchase of the remaining assets and will verify in our Proof of Reserves. We will be sharing a full Proof Of Reserves report by Monday, and we are hoping to give an initial view of Proof of Reserves before that.
Fourth, we are working with law enforcement, blockchain intelligence firms, token issuers and other exchanges to trace and recover stolen funds. We will do everything within our power to ensure that these bad actors will be held accountable.
Lastly, this is an industry-wide effort, and we are grateful to partners across the ecosystem who have moved quickly to help and support. We will weather this storm. Thank you for the support - and stay safe.
www.wsj.com Binance Suspends Transactions After It Is Targeted in Biggest-Ever Cyber Heist The crypto exchange says users will be made whole. But hackers made off with an estimated $6.3 billion. 
