Binance freezes $3bn of assets after $6.3bn suspected North Korea hack

Binance, the world's largest cryptocurrency exchange, has frozen trading after hackers took $6.3bn, about £4.7bn, in what analysts describe as the biggest crypto heist on record. The company says customer funds are safe and that it will cover all losses. It has frozen about $3bn of the affected assets, roughly half. Reports differ on the exact amount: Sky News' technology correspondent Roland Manthorpe said the best data he had seen suggested $2.7bn had been frozen, and ITV reported that more than £2bn had been frozen.

Hackers moved the money across 10 blockchains in about 20 minutes, the BBC reported. Binance's initial investigation pointed to a compromised engineer's laptop, but the company said it had found additional points of breach and believed more than one hacker was involved. BBC News quoted Emily Taylor, chief executive of Oxford Information Labs, saying North Korean groups often lure engineers with fake job adverts and malicious downloads.

Analysts have attributed the hack with high confidence to Trader Traitor, a North Korean group linked to Lazarus, according to BBC News and Sky News. The BBC's Kurumi Mori said crypto theft is likely the third biggest source of North Korean income after arms sales to Russia and coal and mineral smuggling. Channel 4 reported that Ciaran Martin, founder and former chief executive of the UK's National Cyber Security Centre, said there had been 30 to 40 $100m-plus crypto heists over the past decade and they had basically all been North Korea. He said the money helps fund the country's missile programme.

BBC News also aired an interview with Alexander Browder, founder of the global cryptocurrency laundering database, who said North Korea accounted for 30% of all crypto hacks in his database last month. He said the regime has used Russian and Iranian laundering services to turn stolen crypto into cash.

Binance's co-CEO Richard Teng said the company was committed to covering all hacked losses through company funds. BBC News reported that Binance has a $1bn fund for such incidents, though that would not cover the loss alone. The company has also said it will publish proof that it has the funds to repay customers.

Sky News reported that Binance is working with the FBI and US Secret Service. BBC One reported that the US Secret Service is investigating. ITV reported that Binance hopes to resume operations this weekend. Sky News also reported that Binance said it was conducting a proof of reserves audit.

Market reaction was limited but visible. Bitcoin fell more than 4%, BBC One reported. Channel 4 reported that news of the breach sent Bitcoin and other cryptocurrency prices tumbling. Sky News said 9% of people in the UK have a crypto investment, and that crypto lacks the legal protections attached to bonds or shares.

Binance has faced controversy before. BBC News reported that in November 2023 it pleaded guilty to anti-money laundering and sanctions violations and agreed to pay $4.3bn to the US Department of Justice. Its co-founder Changpeng Zhao was sentenced to four months in prison.