Binance Hack: $6.3B Incident and the DevOps Laptop Claim

0:00 All right, guys, we've got a massive developing story here around Binance and the potential hack, or it does look like a hack. And we're seeing almost $ 5. 6 billion being hacked from the exchange. And this is the timeline that we have at the moment. Funds have been frozen across multiple different chains and a lot of USDT, USDC has been blocked from moving. So that is definitely a good thing.

0:26 But let's have a look at the details here. So this is a headline that we're seeing. On-chain data revealed outflow totaling up to 5.7 billion across Ethereum, Bitcoin and Tron from Binance linked wallets, including a huge 167,000 ETH transfer tied to Tornado Cash. So that's the main headline that we're seeing at the moment. And I'm just pulling together some other tweets and posts that are coming out on X at the moment to try and work out what's happening. But along with this, We're also seeing Polymarket hacked, drained for $ 2. 6 million. And we're seeing reports now from Singapore to around the number of tampered Ledger wallets stealing millions in that space there and what's been happening there.

1:11 And they've reported about $ 3. 5 million being hacked across those Ledger hardware wallets. So we're not out of the woods at the moment. It is definitely not safe to be in the crypto space, whether you're on a centralised exchange or decentralised wallets. or even holding in a cold wallet, which you suspect should be safe, but no, it's not at the moment. So this is what I found from the timeline in regards to what's happening at the moment.

1:36 On the 28th, a wallet gets funded through Tornado Cash. On the 29th at 4pm UTC, it deploys a malicious contract. At 8.20 UTC, Binance Hot Wallet 14 signs a permission pointing to it. At 8.24 UTC, Transaction 1 sweeps the wallet, 14, and 167 ETH gets transferred and 1.6 billion USDT. 24 seconds later, wallet 16 sends 28,000 ETH to the same address.

2:00 At 8.42, 780 million USDC leaves wallet 34. At 8.45, BTC drops 2,500 in one candle. and 627 million in longs are completely wiped. So if you are tracking charts, this is probably why you're seeing the big drops at the moment. At 9.11, Tether starts freezing 1.567 billion USDT locked, and at 9.13, Circle freezes 823 million USDC. At 9.15, CZ Binance says it does look like a hack. And at 9.29, Binance states that users' funds are completely safe.

2:48 Another 200 million USDT drain since and still ongoing. So that's the timeline that we're seeing at the moment. A lot of assets being moved out. I think it's been about four or five hours since this has all started and it's still ongoing. We've got a post here from Watcha Guru tracking what assets and how much of these assets are moving out. The biggest one there that you can see is that 1.45 billion BTC and the 875 million of the ETH. So you can see all these assets are moving out at the moment. But thankfully, a lot of this is being frozen. Hopefully, we don't see it all being liquidated on the markets. This is the official announcement from Binance about an hour and a half ago.

3:29 We're working nonstop to resolve this issue. Binance will cover all losses. As a precaution, all deposits and withdrawals are temporarily suspended while our team conducts security checks, freeze funds, and work with law enforcement. We are working around the clock and will share a full post-mortem once the investigation is complete. Please rely only on official Binance channels for updates.

3:53 And this is an industry-wide effort, and we are grateful for our partners across the ecosystem who have moved quickly to help freeze affected assets. We will continue to share verified updates through official Binance channels. User funds are safe. So please guys, if you are monitoring this, if you do have funds on Binance, make sure you follow the official channels. If you get emails from Binance, double check on X to see if that information in the email actually matches up with what's happening on X. I'll be very cautious on clicking anything that is being sent directly to your email at the moment because it's Other scammers may be jumping in right now, seeing this big announcement come out and then start sending out phishing email campaigns

4:39 that are trying to get access to your Binance funds or your crypto wallets or whatever it might be. So be extremely cautious with what's happening at the moment. Now, this is another update that came out from Binance just about an hour ago. So update the current verified total frozen amounts is around 3 billion. So out of that 5.7, 3 billion now has been frozen. Our teams continue to work closely with law enforcement issuers, blockchain intelligence firms, and industry partners to trace and freeze additional assets. And this post here comes from Yi He, co-founder and chief customer service officer at Binance. And she states that Binance will cover all hacking losses. Now, this here is something that

5:22 was stated when FTX crashed not many years ago. I think it was a few years ago now. It just feels like ages ago. But the exchanges since then, from what I've been told, do have a lot more backup and safety funds in case this ever did happen again. Whether exchange collapses, whether there's a run on the exchange, whether a big hack like this happens, the exchanges, from what I've been told, have been putting away a lot of funds. So let me just go down here a little bit further. And here you can see other people in the comments here being very skeptical of the exchange actually having their funds and being able to cover all of the assets that were being stolen. But from what I've been told and what I completely understand from the

6:09 industry since FTX, they have made huge efforts to ensure that they do have the funds to cover from massive hacks like this or massive collapses that may happen in the industry. We have a very volatile industry in the crypto space. So having the extra funds to cover any things like this that may happen because we don't have insurance like many banks do to cover collapses. So from what I understand, that is how the industry has changed since FTX. And I do believe personally that Binance do have the funds to cover any of these hacks. The fact that there has been approximately $ 3 billion of the funds being frozen at the moment, which means they can get those funds back eventually, that $ 3 billion. But then

6:51 the other $ 2 billion is what they need to cover in terms of losses. But they may be able to recover more. So hopefully, we do see that last $ 2. 7 billion also recovered and they don't need to cover it from their own funds. Now, while recording this, another announcement had come out from Binance. And this is very concerning here.

7:12 So let me just read you out this updated report. Binance initial investigation suggests that the security incident may have involved a compromise between DevOps engineer's laptop, which allowed an attacker to gain access to a service container and submit unauthorized withdrawal transactions. We found no evidence of any wallet private key leak. We will share details technical postmortem once investigation is complete and the facts are fully verified. The estimate impact sits at around $ 6. 3 billion, so the number has gone up. We have worked with blockchain partners to freeze affected assets with $ 3 billion frozen on-chain so far.

7:52 Binance will cover all losses and the Seifu Fund and the company's funds. User funds are safe. We will also publish updated proof of reserves once remediation is complete. So it's kind of crazy here to see that one DevOps engineer's laptop could have been a source of this potential compromise. Very scary indeed, but we'll find out more once the investigation is done and the report is put up. All right, guys, that's all I got for this particular update. This is a developing story and I'll keep you guys up to date with what I find out as well. So if you want to be kept up to date via YouTube here, make sure you hit that thumbs up, like, subscribe and notification bell. I will be looking at other hardware wallet alternatives.

8:33 I used to have a ledger. I used to have a keystone and use them on a regular basis, but I'm looking at my other options now to see what's available. I'm playing around with this one here. I just got this one the other day. The OneKey team sent me this one, so I'll be checking out this wallet to see how it works. It's a classic, so I think that's the cheap one. And then I also got this Tangent wallet here. This is the physical card one as well.

8:59 It looks quite nice, but I'll be checking out those ones there to see how these ones compare to Ledger, Keystone, and all those other hardware wallets out there, because we kind of need to look for alternatives so we can spread out assets and you know if one gets compromised you still have assets on another so kind of decentralizing your risk and it kind of makes sense but i'll be looking to those ones and be giving detailed honest reviews as well anyway like i said guys hit that thumbs up on the way out youtube memberships down below buy me a coffee links there as well great ways to support the channel otherwise try and keep positive guys and i'll see you in the next video Thank you.