Unlike traditional banking systems or credit card networks, most cryptocurrency transactions are irreversible. This is one of the reasons why cryptocurrency investment or trading is a risky business. If you fall for a scam, send funds to a fraudulent address, or have your private keys stolen, there is no customer service desk, fraud department, or chargeback mechanism to reverse the transfer. In short – you’re screwed.
While the core math of a blockchain may be secure, the platforms people use to buy, sell, and store crypto are prime targets for cyberattacks. Major centralized exchanges have suffered massive breaches. And the latest casualty is Binance – losing US$6.3 billion – and was forced to suspend transactions Thursday (October 29) as the exchange investigates the biggest cyber heist in history.
The world’s largest crypto exchange said in a post on X – “We have worked with blockchain partners to freeze affected assets, with around US$3 billion frozen on-chain so far.” Binance’s founder Changpeng Zhao said in a post on X – “It does look like a hack on Binance.” While Binance has temporarily suspended all deposits and withdrawals, it also said it will cover all losses and “user funds are safe”.
Zhao, who founded Binance in 2017 but no longer leads the world’s biggest crypto exchange although remains its largest shareholder, added that stablecoin providers Tether and Circle had moved quickly to freeze some US$1.7 billion in stolen assets. For crypto faithful who had been basking in a two-month-long price rebound, the Binance incident is a potential setback.
The largest cryptocurrency exchange in terms of daily trading volume of cryptocurrencies was initially based in China, then moved to Japan, subsequently left Japan for Malta, and now has no official company headquarters. Binance, which allows users to buy, sell and trade digital assets, has 335 million registered users globally and had about US$162.8 billion in assets under custody as of the exchange’s 2025 annual report.
Cybersecurity research firms TRM Labs and Pangolin Intelligence said the heist appears to have been conducted by North Korea’s TraderTraitor – North Korea’s elite hacking unit – based on robust on-and off-chain intelligence. The group has been behind many of the largest crypto hacks in recent memory. “This was absolutely North Korea,” – said Nick Carlsen, a senior investigator on the Global Investigations team at TRM.
But how did it happen? Binance revealed in a statement on X that an initial investigation into the incident suggested it involved “a compromised DevOps engineer’s laptop,” which allowed the attacker to “submit unauthorized withdrawal transactions.” In a follow-up statement on X early Friday, Binance said a “subsequent investigation has uncovered additional points of breach.”
The bulk of the heist unfolded in around 20 minutes beginning late on Thursday (Oct 29). TRM said the attackers were able to order wallets that Binance uses to empty into hacker-controlled wallets, mirroring a 2025 heist at crypto exchange Bybit, which the US Federal Bureau of Investigation (FBI) had attributed to Pyongyang, where North Korea-linked hackers made off with almost US$1.5 billion of tokens – the biggest crypto hack before now.
North Korea has been repeatedly accused of using cryptocurrency theft to generate revenue to help fund its weapons programmes. In 2025, North Korean hackers are believed to have stolen at least US$2.02 billion in cryptocurrency, according to experts. Crypto theft is likely one of its biggest money-makers. The nature of crypto as an electronic currency makes these kind of transfers easier to execute and hard to reverse.
“This was a complex attack, and we are doing all we can in coordination with law enforcement to resolve it. We are still gathering the facts, and will share more directly as we have them,” – Binance said Friday, adding that withdrawal service should resume in 45 hours. The company is working with law enforcement to “to confirm the identity of the criminals and bring them to justice.”
Exchange thefts and malfeasance have been an ever-present backdrop of crypto’s almost two-decade ascent, the most famous of which was the collapse of Sam Bankman-Fried’s FTX in November 2022. In what remains perhaps the most notorious hacking incident, Japan-based Bitcoin exchange Mt. Gox was struck in 2011. Mt. Gox eventually went bankrupt.
When stablecoin providers freeze stolen funds, hackers cannot move, transfer or cash out of those specific tokens. They essentially blacklist the hacker’s crypto wallet address, trapping the tokens inside the wallet before hackers can convert them into other cryptocurrencies or launder them through a mixer (such as Tornado Cash), or converting them into fiat currency.
However, not all crypto can be frozen as freezing only applies to centralized fiat-backed stablecoins that possess administrative “kill switches”. Therefore, hackers often try to swap freezable stablecoins into unfreezable assets (such as ETH or BTC) or split them across multiple chains within minutes of a heist before blacklists take effect. It is a race against time.
Crypto exchanges are tempting targets for hackers. Unlike stock exchanges, which facilitate trading but don’t actually hold securities on behalf of investors, many crypto exchanges store cryptocurrencies for their customers. As a result, many exchanges have suffered heists in which hackers extract customers’ funds from the exchanges’ crypto wallets in the hope of cashing out.
“This is a huge hit in absolute dollar terms,” – said Kevin March, co-founder of JPEG Trading. He expects the loss to be manageable for Binance given the exchange’s US$1.2 billion insurance fund and the swift move by Tether and Circle to freeze stolen assets. Binance.US, the exchange’s U.S. arm, said it isn’t affected by the security incident.
The impact of the hacking saw Bitcoin slumped 3% at the end of the U.S. session and a further 3% in Asia trading, falling below US$77,000 to its lowest level since September, with other tokens also selling off. “The rumoured Binance hack is definitely driving down coin prices,” – said Fredrick Collins, chief executive and co-founder of crypto data platform Velo Data.
Binance said the company had set aside around US$6.34 billion of company funds internally to cover the losses, without giving details about where the funds had come from. The company has a US$1 billion bitcoin reserve fund designed to protect customer assets in the event of security breaches, according to its website. Changpeng Zhao said the company owned SpaceX shares worth more than US$1 billion.
Paolo Ardoino, the CEO of Tether, said in an X post that it froze more than US$1.5 billion of the stablecoin “related to a potential Binance exchange hack”. Jeremy Allaire, who runs Circle Internet Group, said US$800 million of its coin had been frozen amid “reports of a potential exploit involving Binance”. Crypto firm Ripple also froze roughly US$200 million in funds.
Even before the biggest cyber heist in history, sentiment was already fragile after a spate of crypto security incidents. In recent months, hundreds of millions of dollars were drained from Bitget, while tampering tied to Ledger devices also led to millions of dollars in losses. “Attackers are operating at unprecedented speed and scale but the tools to track and trace operate at that speed too”, – said Ari Redbord, global head of policy at TRM Labs.
Traders had already been bracing themselves for greater volatility in the crypto market this week, with US$11 billion in options set to expire on Oct 30. This comes days ahead of the US midterm elections taking place next week, when Democrats could potentially retake one or both chambers of Congress and open the door to greater regulatory scrutiny for the industry.
The Binance incident came on the same day event-contract venue Polymarket halted trading on its international exchange for an hour after it said that a third-party software provider was compromised. More than 700 Polymarket users were drained of US$2.7 million in funds, said blockchain analytics platform Bubblemaps in a post on X.
“It’s a huge damage to crypto because of the consistent successful hacks in the space,” – said Tian Zeng, CEO of crypto hedge fund Third Eye. “The fact that exploits keep happening makes it dangerous in the age of newest AI models being released every two weeks.” Even though the blame is on North Korea, the simple fact that Binance could be hacked again could shake faith in digital assets.
In the past, Binance has weathered years of legal and regulatory problems. In 2023, the company pleaded guilty to violating anti-money-laundering laws and paid US$4.3 billion in penalties to the U.S. government. Mr. Zhao was sentenced to four months in federal prison.After his release, Mr. Zhao received a pardon from President Donald Trump.
The attack on Binance was a stunning illustration of the risks of trading crypto, a renegade branch of finance. For years, the industry has sought mainstream respectability, pouring money into politics and earning the support of President Trump, who pledged to make the United States the “crypto capital of the planet.” But the industry remains a wild west, vulnerable to hacks and fraud.
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October 30th, 2026 by financetwitter
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