Binance reports hackers spent months preparing multi-billion dollar theft

Industry experts assert that the Binance hack, amounting to a record $6.3 billion and becoming the largest cryptocurrency theft globally, demonstrated operational weaknesses in crypto exchanges rather than any issues with the blockchain technology itself.

The world's largest cryptocurrency exchange estimated the total alleged damage at approximately $6.3 billion, which is four times the amount stolen during the previous record—the Bybit hack. About $3 billion in assets that passed through wallets linked to hackers were identified and frozen. The exchange promised to cover all incurred losses.

Binance reported that initial investigations pointed to a compromised DevOps engineer's laptop, which allowed the attacker access to a service container and sent unauthorized withdrawal transactions. Later, the exchange clarified that further study uncovered additional points of entry, contradicting the initial finding of a single compromised laptop. However, the exchange stated it found no evidence of private wallet key leakage.

The UAE financial services regulator overseeing the Abu Dhabi Global Market stated that it is aware of the incident and is monitoring the situation. Binance confirmed that it has allocated over $6.34 billion from its own funds to cover the consequences of this incident.

Georgy Kucherin, Senior Security Researcher at Kaspersky GReAT, noted that the attack on Binance and a separate incident on the Polymarket prediction platform involving a compromised script from third-party developer DebugBear prove that exchanges can be hacked both through internal systems and external dependencies. He added that technical personnel remain the weak link, as even experienced engineers can inadvertently upload malware.

Sandip Pyapali, founder and CEO of Mesta, suggested that the attacker likely used the exchange's own access channels. He believes that if the hacker gained privileges through an employee's device, the system might have accepted the withdrawals as legitimate. Pyapali characterized the event as a 'maturity test' for the crypto industry, not a catastrophe, noting that exchanges will now require more robust safeguards, deeper insurance, and larger reserves.

Karsten Menke, Head of Next Generation Research at Julius Baer, stated that this incident is a 'company problem, not a crypto problem,' thereby highlighting the risks of holding assets on centralized exchanges. He recommended using self-custody in offline cold storage to reduce risk exposure. Menke also mentioned that there is no evidence of AI involvement in the attack, but noted that AI reduces the cost and speed of sophisticated attacks. He cited industry estimates that one of four malicious attacks now utilizes AI, reiterating Julius Baer's constructive view on cybersecurity.

Vincent Choc, CEO and Founder of First Digital, noted that the past day showed how crucial coordination between exchanges, issuers, and networks is when they exchange information within hours. Sergey Kunts, co-founder of 1inch, reported that Tether and Circle froze over $2.4 billion in stablecoins, and other teams blocked addresses associated with the exploit. According to him, this 'significantly limited' the attackers' ability to move funds.

Binance, considered the largest global platform for cryptocurrency trading, was the victim of a hacker intrusion that resulted in the theft of $6.3 billion (equivalent to R$ 33.9 billion in direct conversion) in assets held in its users' wallets. This incident is cited as the largest cyberattack ever documented involving cryptoassets, although investigations must confirm this claim.

If confirmed as the largest attack, the event at Binance would surpass the $1.5 billion loss suffered by Bybit in February 2025, an attack linked to the North Korean hacker group known as TraderTraitor.

In response to the incident, Binance announced that it will assume full responsibility for the damage caused by the attack, as disclosed in its post on the X platform. However, the company had to temporarily suspend withdrawal and deposit processes (although the latter have since been reactivated) while analyzing its systems and investigating the situation.

The cyberattack began on October 29, 2026, with most of the fraudulent transfers occurring within a twenty-minute period, despite other movements being registered in the subsequent hours.

Preliminary analysis conducted by Binance suggests that the intruders gained access to a DevOps engineer's laptop. Using this computer, the hackers allegedly managed to penetrate Binance's internal systems by leveraging the engineer's access privileges. This allowed them to execute cryptocurrency transfer transactions using the company's own system authorizations, without needing to violate or capture cryptographic keys.

Binance also communicated that it has identified other potential vulnerabilities in its systems, indicating that the engineer's laptop may have been only one of the vectors used in the attack.

According to the initial investigation conducted by the digital security firm TRM Labs, the hacker group TraderTraitor reappears as the probable perpetrator of this action.

The total amount of the loss was not higher because a significant portion of the stolen cryptoassets consisted of stablecoins, which are digital currencies pegged to the value of fiat currencies and issued by corporations capable of blocking these assets in digital wallets.

In this specific case, Tether, the issuer of the USDT stablecoin, blocked assets totaling $1.77 billion. Concurrently, Circle, responsible for USDC, froze an equivalent amount of $825 million. Furthermore, other entities, such as Ripple, also participated in the blocks.

However, cryptocurrencies like Bitcoin and Ether do not have the same blocking mechanisms, which led the intruders to attempt to convert part of the stolen stablecoins into unprotected cryptoassets. The swift actions taken by Tether, Circle, and other companies helped contain these operations.

Despite this, a considerable volume of cryptocurrencies was captured by the intruders. CEO Richard Teng and co-founder Changpeng Zhao assured that Binance will fully cover the $6.3 billion lost, using its own funds and a guarantee fund called SAFU (Secure Asset Fund for Users).

Affected customers should await further instructions provided by Binance itself.

Hackers stole $6.3 billion (equivalent to approximately 33.71 billion Brazilian reais) from Binance, the world's largest cryptocurrency exchange. Analysts consider this incident the largest in the sector's history.

This incident caused a market drop, prompted industry companies to freeze some funds, and raised questions about the security of digital asset trading platforms.

According to the American blockchain analytics company TRM Labs, the attackers gained access to Binance wallets across 10 different networks and transferred the majority of the funds in about 20 minutes. The company linked this attack to North Korean groups, noting technical similarities with previous thefts attributed to Pyongyang, including the 2025 hack of the Bybit exchange, which was investigated by the FBI.

Chainalysis reported that it could not yet confirm the cause of the intrusion. By 9:30 AM Brazilian time, the company had identified at least $5.912 billion (approximately 31.63 billion Brazilian reais) in stolen assets.

Mark Karpeles, former head of the Mt. Gox exchange, told Reuters that Binance's assets appear to be distributed across different systems. He speculated that the hacker might have obtained valid authorization to move funds in certain platform systems and possibly even access to a private key.

Binance cooperated with partners to block the affected resources and managed to localize about $3 billion (16.05 billion Brazilian reais). Co-founder Yi He confirmed that the company would cover all losses resulting from the attack.

Other companies also participated in efforts to prevent the movement of funds. Binance's initial investigation showed that the breach might have started with the compromise of one engineer's computer. This access allowed the attacker to penetrate one of the exchange's systems and execute unauthorized withdrawals.

The company stated that user deposits were unaffected and expected to resume withdrawals within 48 hours after the attack. Binance also holds a customer protection fund composed entirely of Bitcoin.

For Kenneth Goh, Director of Private Capital Management at UOB Kay Hian, the attack on one of the world's largest exchanges should prompt investors to pay more attention to asset custody and platform responsibility in case of security failures.

The market reacted to the incident with decreased trading. Bitcoin fell by more than 3%, reaching a six-week low of $76,368. Ethereum also lost over 3%, dropping to $2,178. Coinbase shares fell by 4.8%, and Strategy shares dropped nearly 6% in extended trading in the United States.

Amanda He, Investment Director at ChainUp Investment, told Reuters that the initial drop might have been caused by the cryptocurrency being sold by the attacker himself. In her opinion, this step contributed to spreading investor concerns during the Asian session. She mentioned that her company sold positions held on Binance and converted the proceeds into stablecoins.

For Tim Sun, Senior Researcher at HashKey Group, the pause in deposits and withdrawals on Binance could negatively affect capital flow between platforms and impact market makers responsible for providing buy and sell prices to facilitate trades.

Liquidity concerns are also featured in assessments by Damon Xu, founder of 1Token. Commenting to Reuters, he predicted a reduction in strategies involving simultaneous operations across different exchanges and the use of leverage, which allows trading with borrowed funds. Xu believes that decentralized platforms may benefit from potential capital and commercial activity shifts.

Jeff Ko, Lead Analyst at ViaBTC, assessed to Reuters that Bitcoin might face less selling pressure because its transactions are tracked on the blockchain, making it difficult to move stolen funds without leaving traces. Ethereum, conversely, might experience greater pressure due to the availability of tools that facilitate obscuring transaction origins.