Binance CEO: Regulation helps crypto credibility, but it’s not ‘a magical pill’
01:21 – Source: CNN Business
Hong Kong/New Delhi CNN Business —
The crypto industry just can’t catch a break this year.
Binance, the world’s biggest cryptocurrency exchange, is investigating a hacking incident that affected a number of crypto tokens Friday. According to its founder and CEO Changpeng Zhao, a private key, used to encrypt or decrypt data, had been hacked.
“Initial analysis is developer private key was hacked, and the hacker updated the smart contract to a more malicious one,” Zhao said on Twitter, adding that the Ankr and Hay tokens were affected.
Binance paused withdrawals a few hours ago, CZ tweeted. He appeared to be referring to Ankr’s loyalty token aBNBc, which was targeted by the hack, according to Binance. Hay is a stablecoin, a kind of cryptocurrency that is pegged to another asset.
“Smart contract” is a term used to describe computer code that automatically executes all or parts of an agreement. It is usually stored on a blockchain-based platform.
“A hacker managed to exploit a vulnerability in the code of aBNBc that allowed them to mint 6 quadrillion tokens, which was converted into BNB tokens [Binance’s own coin] and transferred through the crypto mixer platform Tornado Cash,” said Matt Hussey, who writes a crypto newsletter called Zero Knowledge.
“It’s another example of the vulnerability in many of the contracts that power protocols and exchanges in the crypto space,” he added.
In a separate tweet, Binance reassured its users by saying that “this is not an attack” against the company, and that its team was working to investigate.
Ankr, meanwhile, said on Twitter, that it is “committed to compensating affected users.”
“The team at Ankr has assessed the damage and it is max 5 [million US dollars] worth of BNB,” it said.
Binance did not immediately respond to a request for more information.
The apparent attack comes at a time when the digital assets industry is struggling with the financial contagion unleashed by the fall of crypto exchange FTX.
Blockchain analytics firm Chainalysis said in October that more than $3 billion had been hacked from the crypto industry across 125 attacks in the first ten months of the year, and that 2022 was on track to be a record year for such exploits.