Mercado Bitcoin suspends withdrawals due to security incident in system

Binance announced on Friday, the 30th, that the investments of its Brazilian users remain safe despite a cyberattack that occurred on Thursday, the 29th, which culminated in the theft of US$ 6.3 billion, equivalent to approximately R$ 34 billion, in cryptocurrencies.

The exchange clarified that the assets of Brazilian clients are held in cold wallets, meaning access keys are isolated from internet connection. Furthermore, Binance confirmed compliance with Central Bank guidelines, which stipulate the segregation of client funds from those belonging to the company itself.

Although asset security is guaranteed, the platform temporarily suspended cryptocurrency withdrawals to conduct internal system checks. Binance classified this interruption as a preventive measure and estimates that withdrawals will be restored within 45 hours. Deposits were not affected, and other services of the exchange continue to operate normally.

In an official statement, the company emphasized that protecting its clients' virtual assets is its top priority and apologized for the inconvenience caused.

This incident caused a drop in the cryptocurrency market and also affected funds and companies related to the sector. Around 2:24 PM on Friday, quotes showed this downward trend.

It is important to note that the separation of resources required by the Central Bank does not negate the possibility of hacker attacks nor guarantee compensation for any losses. Additionally, cryptocurrencies are not covered by the Credit Guarantee Fund (FGC).

André Matos, CEO of MA7 Capital, pointed out that the most immediate risk for Binance clients is the temporary inability to access their funds, and not necessarily the definitive loss of investments.

The exchange committed to covering the losses using its emergency fund, own resources, and the stolen amounts that have already been blocked. However, Matos stressed that the company's ability to fully cover all losses still lacks independent verification.

He also warned that the coverage promise only applies to the stolen assets, not to the depreciation of asset prices. This means that investors whose cryptocurrencies were not directly targeted by the attack may suffer losses due to asset depreciation.

Celso Camilo, a doctor in Artificial Intelligence from the Federal University of Goiás (UFG), observed that those who use other platforms may not be exposed to the attack but may still feel the effects of the general market decline. He recommended that the first step is to identify where the cryptocurrencies are stored and which institution is responsible for custody.

According to Matos, those who keep assets in the Binance account are directly vulnerable to the problem. Conversely, those who use a personal wallet, controlling the keys exclusively, do not have these assets directly affected by the attack, although they remain subject to price fluctuations.

To mitigate risks, the expert suggests enabling two-factor authentication, keeping investment receipts, and being suspicious of messages promising to release withdrawals upon providing passwords or personal data. He also advised against concentrating all investments in a single exchange. For those planning to hold cryptocurrencies long-term, it is crucial to evaluate the use of a private, preferably physical, wallet with extreme care in protecting recovery phrases.

The theft is classified as the largest ever recorded in the cryptocurrency industry. American companies, TRM Labs and Chainalysis, indicated that the perpetrators would be hackers associated with North Korea. However, Binance informed that its investigation has not yet identified the criminals.

As reported by Reuters, the exchange is cooperating with law enforcement agencies from various countries, including the Federal Bureau of Investigation (FBI) and the U.S. Secret Service (USSS).

So far, about US$ 3 billion (R$ 16.2 billion) of the stolen crypto assets have been located. Part of these resources was blocked with the help of other industry companies, but this does not confirm the recovery of the money.

Initially, Binance suspected that the intruders had gained access to one of its engineers' computers. Later, the company disclosed having detected other vulnerabilities exploited by the criminals. According to TRM Labs, the hackers compromised the system responsible for authorizing cryptocurrency transfers.

Most of the theft occurred over an approximate period of 20 minutes, around 5 PM Brasília time. After the diversion, the criminals quickly moved the funds to hinder tracking and blocking of the funds.

Binance, the world's largest cryptocurrency platform, announced on Thursday the freezing of $3 billion in crypto assets during an investigation into a potential security breach. Consequently, related assets belonging to stablecoin issuers Circle and Tether were also frozen.

Binance co-founder Yi He stated that 'Binance will cover all losses from the hack,' but provided no further details about the incident. The impact of this potential hack, which the analytics firm Chainalysis considers potentially the largest crypto heist in history, was immediately felt during early trading in Asia on Friday.

As a result of the incident, Bitcoin dropped by approximately 2%, reaching a six-week low of $77,646, while Ethereum fell about 2% to a two-month low of $2,238.76. The BNB token, originally launched as Binance Coin for paying Binance fees, lost over 8% in the last 24 hours, settling at $694, according to the market aggregator CoinGecko. The cryptocurrency exchange Coinbase Global slipped by 4.8%, and the Bitcoin buyer exchange Strategy fell nearly 6% during extended trading in the US.

Binance clarified that the amount of frozen funds may increase as the company collaborates with law enforcement agencies, token issuers, blockchain analytics firms, and other industry partners to track and block additional assets. Binance co-founder Changpeng Zhao, who no longer leads the company, stated in an X post that the incident 'resembles a hack.'

Binance, which allows users to buy, sell, and trade digital assets, has over 335 million registered users worldwide and held approximately $160 billion in assets under custody as of its 2024 annual report.

Binance Maintains a Protected Asset Fund

According to the Binance website, the exchange manages a protected asset fund for users. This reserve consists entirely of Bitcoin and is intended to safeguard user assets in the event of security breaches. Bernardo Brites, CEO of Trace Finance, a company specializing in payment and stablecoin infrastructure, noted that 'it is becoming very difficult to resist hacks because AI can find vulnerabilities faster than you can fix them.' He added that he believes users will start leaving smaller and medium-sized exchanges because 'it is too risky to keep your money where they cannot cover a significant hack.'

Tether reported freezing assets related to the incident worth nearly $1.57 billion, while Circle froze over $800 million. Binance stated that it is conducting security checks and will resume withdrawals after the issue is fully resolved, emphasizing that user funds remain safe while teams investigate the incident. As a precautionary measure, the exchange also temporarily suspended trading on its Binance Alpha platform.

World Liberty Financial, a crypto company associated with US President Donald Trump and his family, announced on Thursday that it had cooperated with cryptocurrency custodian BitGo to freeze funds stolen in what they termed the Binance hack. According to Yi from Binance, $27 million in stablecoins and about $2 million in World Liberty Financial tokens were frozen. Additionally, the crypto firm Ripple froze approximately $200 million in funds. Jack McDonald, Vice President of Stablecoins at Ripple, stated that the company is closely monitoring reports of a possible exploit related to Binance and is freezing affected funds while coordinating with relevant parties.

Incident Adds to String of Crypto Heists

Miguel Morel, CEO of blockchain analytics firm Arkham, reported that data suggests billions of dollars may have been stolen from Binance by an unknown perpetrator, although the exact cause has not yet been confirmed. Morel noted that the incident began around 4:30 PM EDT (8:30 PM GMT) and apparently continued. This case joins a series of crypto heists. According to researchers at TRM Labs, attackers stole $2.9 billion in cryptocurrency in almost 150 attacks last year. In September, the cryptocurrency exchange Bitget reported a theft of approximately $350 million from its platform, highlighting the industry's vulnerability to hackers.

Authorities warn that organized crime groups are increasingly using cryptocurrencies for cross-border fund transfers outside the traditional financial system. Binance.US, a separate cryptocurrency exchange, stated that it was not affected by the security incident. Coinbase also stated that it was unaffected and is monitoring the situation. In an unrelated incident earlier on Thursday, the prediction market operator Polymarket temporarily suspended trading following a security incident involving a third-party provider but later resumed trading and promised to fully compensate affected traders.