(Oct 30): A security breach at Binance involving up to US$6.3 billion (RM25.5 billion) is the biggest crypto hack on record, raising fresh questions about the industry’s ability to protect digital assets as it seeks to woo traditional finance.
The incident at the world’s largest crypto exchange highlights how vulnerabilities can extend even to the biggest players.
“This is the largest cyber theft on record, not just the largest in crypto,” said Aneirin Flynn, chief executive officer of cybersecurity technology firm FailSafe. “This will damage confidence in crypto. The industry is courting institutional capital, but institutions will not overlook repeated failures in custody and security.”
So far the total impact sits at around US$6.3 billion, Binance said in a post on X on Friday, adding that it will make good all losses. Binance has temporarily suspended withdrawals on the exchange.
Series of hacks
The hack extends a string of costly breaches across the cryptocurrency industry. In February 2025, Dubai-based Bybit suffered a US$1.5 billion theft, then the largest single crypto heist on record. The FBI blamed North Korean hackers, who dispersed the stolen assets across thousands of addresses on multiple blockchains.
There have been several big heists in recent months.
In August, hackers absconded with more than US$100 million worth of bitcoin from thousands of wallets secured by hardware devices made by Canada-based Coinkite Inc. The attack exploited a software flaw that made the private keys protecting the crypto predictable.
In September, crypto exchange Bitget said attackers made off with about US$388 million. And in October, criminals tampered with Ledger hardware wallets distributed through a Southeast Asian reseller, with blockchain researchers estimating losses of more than US$90 million. Ledger said its own systems weren’t breached.
Prediction market Polymarket temporarily halted trading this week after a third-party provider was compromised, with more than US$2.5 million lost.
The incidents highlight the breadth of vulnerabilities facing crypto businesses, from their own wallets and technology systems to supply chains and outside providers.
The risks extend beyond crypto-native companies. In South Korea, a series of cyberattacks has hit financial institutions in recent weeks, including cryptocurrency exchange Bithumb Co, Mirae Asset Global Investments Co and Daishin Securities Co reporting unauthorised access that exposed user data.
The breaches have raised questions about the security of outsourced systems and third-party technology providers as financial firms increasingly rely on interconnected digital infrastructure.
“Every bank, asset manager and exchange operator trying to put treasuries, funds or equities on-chain has to pick a settlement layer, and until tonight ‘the biggest exchange’ was a defensible answer,” said Luca Parlamento, founder and chief investment officer at D2 Finance. “Now it’s an unsecured credit decision.” D2 Finance doesn’t have any transactions on Binance, Parlamento said.
Points of failure
Initial investigation suggests that the security incident may involve an engineer’s compromised laptop, Binance said in its post.
According to blockchain analytics firm TRM Labs, North Korea is behind the hack. It said preparation started at least 36 hours before the theft.
“On the evening of October 29, billions of dollars in crypto began leaving wallets belonging to Binance” across 10 blockchains — including bitcoin, ethereum, solana and XRP — and flowing to addresses controlled by a single attacker, TRM said.
For exchanges holding billions of dollars in customer assets, the challenge is no longer simply securing private keys or keeping most funds in offline storage. Wallet systems increasingly involve multiple signers, automated transaction processes, smart-contract permissions and external service providers.
“The lesson for an allocator isn’t that crypto is risky. It’s that an exchange balance is an unsecured loan to a company that can lose its keys,” Parlamento said.
Uploaded by Chng Shear Lane