Binance just shut down its blockchain, after getting hacked and losing over $100 million in crypto coins!
The shutdown prevented an even bigger loss of $566 million, but it defeated a key purpose of the blockchain – decentralisation.
Binance Smart Chain Halts After $100M Crypto Theft!
On Thursday, 6 October 2022, Binance Smart Chain was hit by a hacker who targeted 2 million Binance coins (BNB) worth $566 million.
The attack appeared to have started at around 2:30 PM EST, with the attacker’s wallet receiving two transactions of 1 million BNB coins.
Soon after that, the hacker tried to liquidate the BNB coins into other assets, by using a variety of liquidity pools.
Binance acknowledged the security incident several hours later, at 6:19 PM, and halted the BNB Smart Chain.
AT 7:51 PM EST, Binance CEO Changpeng “CZ” Zhao confirmed that an exploit was used in the BSC Token Hub to transfer the BNB coins to the attacker, and that they asked all validators to temporarily suspend the Binance Smart Chain. He also claimed that the funds are safe.
An exploit on a cross-chain bridge, BSC Token Hub, resulted in extra BNB. We have asked all validators to temporarily suspend BSC. The issue is contained now. Your funds are safe. We apologize for the inconvenience and will provide further updates accordingly.
Binance Smart Chain Almost Lost $566 Million!
The majority of the 2 million BNB coins worth $566 million remained on the BNB Smart Chain, and was made inaccessible to the hacker, after BSC was shut down.
This is rather ironic since blockchains like BSC are supposed to be decentralised, and not meant to be so easily turned off – a fact BNB Chain acknowledged.
Decentralized chains are not designed to be stopped, but by contacting community validators one by one, we were able to stop the incident from spreading. It was not that easy as BNB Smart Chain has 26 active validators at present and 44 in total in different time zones. This delayed closure, but we were able to minimize the loss.
Even so, a BNB Chain spokesperson later confirmed that about $100 to $110 million in funds were taken off the Binance Smart Chain, and CZ said that the impact was about a quarter of the last BNB burn.
Of the funds taken off-chain, BNB Chain was able to freeze about $7 million with help from their partners in the cryptocurrency community.
So far, about $2 billion has been lost in crypto hacks in 2022, with cross-chain bridges used to transfer tokens across blockchains a popular target.
BNB Chain said that it would introduce a new on-chain governance mechanism to fight and defend against future possible attacks.
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Dr. Adrian Wong has been writing about tech and science since 1997, even publishing a book with Prentice Hall called Breaking Through The BIOS Barrier (ISBN 978-0131455368) while in medical school.
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