{"id":2218,"date":"2026-11-02T17:56:16","date_gmt":"2026-11-02T17:56:16","guid":{"rendered":"https:\/\/redzine.co.uk\/index.php\/2026\/11\/02\/the-us6-3-billion-binance-hack-is-the-biggest-heist-ever-it-should-be-a-wake-up-call-for-cryptocurrency-users\/"},"modified":"2026-11-02T17:56:16","modified_gmt":"2026-11-02T17:56:16","slug":"the-us6-3-billion-binance-hack-is-the-biggest-heist-ever-it-should-be-a-wake-up-call-for-cryptocurrency-users","status":"publish","type":"post","link":"https:\/\/redzine.co.uk\/index.php\/2026\/11\/02\/the-us6-3-billion-binance-hack-is-the-biggest-heist-ever-it-should-be-a-wake-up-call-for-cryptocurrency-users\/","title":{"rendered":"The US$6.3 billion Binance hack is the biggest heist ever \u2013 it should be a wake up call for cryptocurrency users"},"content":{"rendered":"
<\/span> Dusan Zidar<\/a><\/span><\/figcaption><\/figure>\n

The cyberattack on crypto-asset exchange Binance is potentially the largest theft of its kind on record. Binance has estimated the assets stolen at an eye-watering US$6.3 billion (\u00a34.7 billion).<\/p>\n

On October 29, 2026, analytics firms reported that large amounts of crypto-assets had been moved<\/a> from wallets used by the exchange across multiple blockchain networks \u2013 a digital system for recording transactions that is run collectively by its users. Most of the money<\/a> was moved within a period of about 20 minutes.<\/p>\n

In response, Binance temporarily suspended deposits and withdrawals telling users that it would cover losses using its emergency protection fund and corporate resources. Around US$3 billion of the affected assets was frozen<\/a> by October 30, according to Binance. However, freezing funds is not the same as recovering them.<\/p>\n

As of November 1, Binance says it has restored 95% of the stolen assets. But much of this has come from various funds held by the exchange, as well as its corporate treasury. It has now started to re-open withdrawals in phases<\/a>. The exchange has promised to publish a full incident report once the investigation is completed.<\/p>\n

Investigators say that indicators point to North Korea-linked cybercriminals<\/a>. But attribution should remain provisional until the evidence is fully established. So how might the attackers have breached Binance?<\/p>\n

The emerging explanation points primarily to a compromise of the systems that authorise withdrawals in Binance, rather than a successful attack on the underlying blockchains used for individual crypto-assets such as Bitcoin or Ether. <\/p>\n

Binance initially suggested that an engineer\u2019s laptop had been compromised, potentially enabling attackers to access internal services and initiate unauthorised transactions. However, subsequent statements indicated<\/a> that additional parts of the system had been breached. So it would be premature to treat the laptop as the complete explanation.<\/p>\n

A useful analogy is a bank vault. An attacker may not need to break the vault itself if they can manipulate the system that tells it when to release funds. In crypto-asset exchanges, so-called signing infrastructure performs this authorisation function. <\/p>\n

Investigators believe that attackers were able to obtain or misuse valid authorisations<\/a>, allowing assets to be transferred out of wallets controlled by the exchange. Binance says that it has found no evidence that private keys for wallets \u2013 used to authorise outgoing blockchain transactions \u2013 were leaked.<\/p>\n

One reported element in this was Ethereum\u2019s EIP-7702 feature, which gives conventional crypto-asset wallets functions that they wouldn\u2019t normally have. Investigators observed<\/a> that authorisations linked to this feature had apparently enabled attacker-controlled code to move assets. <\/p>\n

These assets included funds arriving after the initial compromise. However, it does not, by itself, establish a flaw in Ethereum\u2019s underlying consensus mechanism. The consensus mechanism is the set of rules for transactions agreed upon by the decentralised network.<\/p>\n

How secure is cryptocurrency?<\/h2>\n

A central lesson is that the security of a blockchain must be distinguished from the security of the wider ecosystem built around it. A blockchain may maintain a highly resilient and tamper-resistant transaction record. On the other hand, an exchange, wallet provider or other intermediary may be vulnerable. <\/p>\n

Compromised staff credentials, defective access controls, malicious code or weaknesses in transaction approval processes can all act as entry points for cybercriminals.<\/p>\n

This also highlights that many crypto-asset services are not
\ndecentralised. Many exchanges are highly centralised in their custody arrangements, governance and control over customers\u2019 assets. Such concentration can create single points of failure. The decentralised nature<\/a> of a blockchain does not remove the need for effective governance of the businesses operating on it.<\/p>\n

\n \"Binance
\n Binance has reportedly frozen US$3 billion (\u00a32.2 billion) of the stolen assets.<\/span>
\n miss.cabul \/ Shutterstock<\/a><\/span>
\n <\/figcaption><\/figure>\n

The speed and cross-border nature of the theft further complicate enforcement. Stolen assets can be moved through different blockchain networks, swapped into other tokens or channelled through decentralised finance protocols. <\/p>\n

Some issuers of a type of crypto-asset called stablecoins (these act a bit like fiat currencies such as the US dollar) can freeze tokens under their control. This has helped limit losses from the Binance theft. Cryptocurrencies such as Bitcoin and Ether generally cannot be frozen in the same way by an issuer. These differences matter enormously for tracing, recovery and investor protection.<\/p>\n

There is also a growing concern about AI-enabled cybercrime. AI agents may increase the speed, scale and sophistication of attacks on automated financial systems. However, there is currently no established evidence that AI agents carried out this particular hack; the broader risk should not be confused with a confirmed cause.<\/p>\n

Investors and financial stability<\/h2>\n

For investors, this incident is a reminder that owning a crypto-asset involves more than exposure to its market price. There are also custody, cybersecurity, operational, \u201ccounterparty\u201d risks (the exposure organisations have to another body or individual that may default on their obligations) and legal risks. <\/p>\n

Investors should understand who holds their assets, whether customer funds are segregated (that crypto-assets are not used by an exchange or broker to fund their daily operations), what security and recovery arrangements exist and what legal protections apply if an exchange fails. <\/p>\n

They should not assume that crypto holdings enjoy the deposit insurance or central bank safety nets available with some traditional banking activities.<\/p>\n

\n \"New
\n Traditional financial institutions have been exploring technology used for cryptocurrency transactions.<\/span>
\n Jonah Elkowitz<\/a><\/span>
\n <\/figcaption><\/figure>\n

The wider financial stability implications depend on the extent of the connections between conventional banking and cryptocurrencies. Traditional financial institutions are increasingly exploring distributed ledger technology (a digital system that stores and shares data across a decentralised network of computers) \u2013 seen in blockchain networks \u2013 for tokenisation (a data security feature), payments and settlement. Some banks also facilitate investment exposure to Bitcoin, Ether and other digital assets. <\/p>\n

Nevertheless, as financial institutions, funds and payment systems become more connected to crypto markets, operational shocks and losses could transmit more widely through the system.<\/p>\n

Practical responses<\/h2>\n

My research on crypto-assets, decentralised finance and financial regulation consistently emphasises that innovation must be accompanied by accountability, effective governance and proportionate safeguards. <\/p>\n

Four priorities stand out. First, exchanges need rigorous cybersecurity and operational resilience standards. This includes independent security testing, tightly controlled access privileges, secure signing systems, transaction limits, continuous monitoring and credible plans for responding to incidents like the Binance theft. <\/p>\n

Second, regulators should assess actual control and governance arrangements rather than accepting labels such as \u201cdecentralised\u201d at face value. Entities exercising custody or operational control should have clear obligations.<\/p>\n

Third, consumer protection must be strengthened through the segregation of customer assets, transparent custody practices, clear risk disclosures and workable insolvency and recovery arrangements. Any compensation arrangements should be clearly explained rather than assumed. <\/p>\n

Fourth, international cooperation is indispensable<\/a>. Regulators, law enforcement, exchanges, stablecoin issuers and blockchain analytics providers must be able to coordinate rapidly to trace illicit transfers, preserve evidence and freeze assets where legally possible.<\/p>\n

This case brings a broader message to the surface, which is that technological sophistication is not a substitute for sound governance. Confidence in digital finance will ultimately depend on the resilience of its infrastructure, the accountability of those who control it and the effectiveness of the regulatory framework protecting users and the wider financial system.<\/p>\n

\"The<\/p>\n

Iwa Salami does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.<\/span><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Dusan Zidar The cyberattack on crypto-asset exchange Binance is potentially the largest theft of its kind on record. Binance has estimated the assets stolen at an eye-watering US$6.3 billion (\u00a34.7 billion). On October 29, 2026, analytics firms reported that large amounts of crypto-assets had been moved from wallets used by the exchange across multiple blockchain […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2218","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/redzine.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/2218","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/redzine.co.uk\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/redzine.co.uk\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/redzine.co.uk\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/redzine.co.uk\/index.php\/wp-json\/wp\/v2\/comments?post=2218"}],"version-history":[{"count":0,"href":"https:\/\/redzine.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/2218\/revisions"}],"wp:attachment":[{"href":"https:\/\/redzine.co.uk\/index.php\/wp-json\/wp\/v2\/media?parent=2218"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/redzine.co.uk\/index.php\/wp-json\/wp\/v2\/categories?post=2218"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/redzine.co.uk\/index.php\/wp-json\/wp\/v2\/tags?post=2218"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}