The fortress of security surrounding cryptocurrencies is under attack, as crypto hackers continue to compromise firms and make away with large amounts of cash.
Binance, the world’s largest cryptocurrency exchange, announced on Thursday they had been compromised by hackers. The hackers stole two million BNB tokens, estimated to be worth around $570m, according to CNBC.
The firm temporarily suspended its blockchain network after a cross-chain bridge which linked with its BNB chain was targeted. Cross-chain bridges are used to transfer tokens from one blockchain to another.
“Cross-chain bridge designs remain a technical challenge, with variations across exchanges being attractive targets for hackers,” Suneet Muru, analyst at GlobalData, tells Verdict. “The Binance hack will likely lengthen the so-called crypto winter.
“However, it could also serve as a wake-up call in the long run for exchanges to self-audit their code, allowing for safer, more robust smart contracts to become foundations for future development.”
Oded Vanunu, head of product vulnerability research at cyber security firm Check Point, told Verdict that hackers are upping their game.
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“Hacking groups are making big efforts in the last year to hack these ‘injections’ points that connect networks and are looking for vulnerabilities mainly in the smart contracts and platforms assets such as bridges,” Vanunu said.
“Once hackers manage to exploit vulnerabilities on the platforms or on the ecosystem, they have direct access in the context of the blockchain networks.”
Katharine Wooller, MD at crypto wealth platform, Dacxi tells Verdict that Binance’s fractious relationship with global regulators is not helping.
“[There will be] more government oversight of both stable coins and custody arrangements,” Wooller says.
“Crypto enthusiasts should do ample due diligence on the exchange they use (regulator they are answerable to), and how their digital assets are stored and insured.”
This follows the US Securities and Exchange Commission (SEC) charging Russian Forsage founders with crypto fraud in August. Verdict reported that retail investors raised a whopping $300m through the alleged Ponzi scheme.
GlobalData is the parent company of Verdict and its sister publications.