Binance Announces Significant Hacker Attack

There aren’t many businesses that want to announce that they have suffered a massive loss of money and those in the Cryptocurrency industry are no exception. However, earlier this month BNB chain disclosed that they had lost a significant amount of money due to a hacker attack. The blockchain which is linked to the Binance Cryptocurrency exchange released the news which is less than ideal for anyone that is hoping Cryptocurrency winter is over and that things will go back to being slightly less volatile. 

What Do We Know?

Binance is the world’s biggest Cryptocurrency exchange which is why it might not be a surprise that has recently gotten the attention of hackers. However, what many people might not have been able to predict is that a hacking attack would be able to cost them over $560 million. It wasn’t the platform itself that was targeted, instead, the Binance Smart Chain became a victim of hackers. It is this blockchain that works as a bridge for any asset transfers between networks and so the news that it can get hacked will worry many investors. As you might imagine, the CEO of Binance was quick to release a statement and recently sat down with CNBC News to talk to them about what happened. He emphasised the fact that this is something that we should be learning from saying “cross-chain bridges were particularly vulnerable to hacks and the industry needed to get better at learning from them.” Within this hack attack, no end users actually lost any money, but those that are investing large amounts of money in Cryptocurrency will certainly want to know what is being done to make sure that something like this can’t happen again. 

Talking on their own platform they talked in more detail about how the series of attacks happened and how they will share further details of how it was able to happen later down the line. Of course, their priority is to make the system safe again and ensure that investors have peace of mind and confidence in using their platform once again. 

The History of Cyber Attacks

Of course, Binance isn’t the only Cryptocurrency platform to fall victim to hackers and realistically they won’t be the last. Technology and the security system is always improving and getting harder to crack but then so is the software that the hackers use to infiltrate systems in this way. 

We know that Chainalysis had around $2 billion stolen in a series of hack attacks, as well as the Cryptocurrency based game Axie Infinity which lost $600 million in a similar attack earlier this year. At the start of this year, the Wormhole Network was also a victim of a hack attack which saw them lose $325 million. These hack attacks may seem like they’re not a regular occurrence but with so much money held and transferred within the Cryptocurrency network, there are always going to be unscrupulous people that want to ensure they have a slice of the pie. 

What Happens Next?

Experts are suggesting that this recent hack is a perfect example of why there needs to be more regulation in the crypto industry, similar to how the gambling industry has regulators to ensure safety for its users when they are getting casino offers.

Blockchain providers and Cryptocurrency platforms will no doubt be looking at the security of their own software and doing what they can to ensure that everything is as secure as possible. All eyes will be on Binance to see how they handle this and what changes (if any) they will make in the future. 

It is currently run via a decentralised chain, which is something that will be debated to see if that is the best course of action in this instance. 

“Decentralised chains are not designed to be stopped, but by contacting community validators one by one, we were able to stop the incident from spreading,” Binance Smart Chain said in its statement. “This delayed closure, but we were able to minimise the loss.”

The next step is for the Binance Smart Chain community to vote on what they think should happen – one thing they’ll be discussing is whether the stolen funds should be frozen and whether a reward should be put in place for anyone that helps them capture the hackers. 

The Future of Cryptocurrency

There is no denying that Cryptocurrency is considered volatile even for those that choose to invest in it, but after the last few months many would have preferred news that would make it less volatile rather than more. We’ve seen some big value crashes throughout 2022 which had led to many people considering this period a Crypto winter and we had just got to the stage where people were hoping we could be in for a thaw and that things would start to improve. However, news of hacking attacks like this will do nothing to strengthen people’s confidence in digital currency and many will worry that it could lead to further drops in value later down the line. 

However, what we do know is that the future is pretty impossible for people to predict – otherwise everyone would be doing it. We have less of a track record with Cryptocurrency than we do other similar financial investment opportunities so there are fewer opportunities to see what happened in the past. 

Long-term the Binance attack will be forgotten as other platforms fall victim to similar crimes and other digital currency news dominates the headlines. However, for this month it is likely to have an effect on whether people choose to invest new money in Cryptocurrency and that could have an effect on the value, at least in the short term. Investors will be keeping an eye on the news regarding Binance and digital currency, keen to hear what steps the platform and blockchain have taken to ensure that an attack of this nature can be avoided in the future before they take the plunge and invest once again.

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