FBI links Binance’s $6.3 billion hack to North Korea

Binance suspended withdrawals after hackers stole an estimated $6.3 billion from its wallets on Thursday, Oct. 29, in what the FBI now attributes to North Korean cyber activity. The theft is the largest crypto heist reported to date, according to the Associated Press report on the FBI’s attribution.

For customers, the immediate issue is access to withdrawals while Binance works to secure the exchange and recover funds.

What did the FBI say about the Binance hack?

The FBI said Saturday that the attack was tied to TraderTraitor, a North Korean hacking group, and asked crypto exchanges and blockchain analytics firms to block transactions connected to specified addresses. The bureau said its investigation found the group was converting stolen assets primarily into ether and may use decentralized finance services and instant swaps to move the funds.

The group was also behind the $1.5 billion Bybit hack last year, the FBI said. Naming the group gives exchanges and investigators addresses to monitor, but it does not mean the stolen funds have been recovered.

What was disrupted on Binance?

Binance paused withdrawals, and blockchain analytics firm Elliptic says the pause stopped the outflows while the exchange rebuilds its withdrawal service. Its analysis of the Binance hack estimates that $6.43 billion in cryptoassets was stolen across 11 blockchains; Binance put the impact at about $6.3 billion.

The confirmed disruption is to withdrawals. The available reporting does not establish that Binance halted all trading, so customers should distinguish between being unable to move assets off the exchange and being unable to place trades. The investigation into how the attackers gained access is still under way.

How does Binance say it will cover customer losses?

Binance has promised to reimburse customers in full. The AP reported Saturday that the exchange had set aside enough of the same digital currencies that were stolen to cover 90% of the missing assets. That is a funding commitment, not confirmation that withdrawals have resumed or that the stolen crypto has been recovered.

Elliptic reports that Binance has reserved more than $6.34 billion in company funds, including about $5 billion in the affected tokens. The FBI says the stolen assets are moving into ether and could be routed through DeFi and swap services, making the recovery effort dependent on exchanges, token issuers and investigators identifying and freezing funds as they move.

Sources

• Associated Press report on the FBI’s attribution — apnews.com
• analysis of the Binance hack — elliptic.co