The Binance blockchain suffers from a $100 million hack

Hackers have stolen at least $100 million worth of Binance tokens, a rare blow to the world’s largest crypto exchange and another dent for the struggling digital asset industry struggling to regain trust after a price plunge.

Binance on Friday estimated that about $100 million to $110 million worth of tokens had been stolen, disrupting operations on the affected blockchain for about eight hours. The hack targeted BSC Token Hub, a bridge between two Binance systems.

It comes at a time when digital assets are trying to recover from a credit crunch that has wiped out nearly two-thirds of the value of their best-known tokens, like Bitcoin. Industry data has also shown that project theft is rising sharply this year.

According to Chainalysis data, cybercriminals had stolen nearly $2 billion by the end of July, nearly double the amount in the first seven months of last year. The high-profile thefts included $600 million from the blockchain behind popular crypto gaming platform Axie Infinity. Many hacks have been traced to state-sponsored actors in North Korea.

Binance’s position as the world’s largest crypto exchange means Friday’s exploit will deal a major blow to the digital assets industry.

In a series of social media posts, Changpeng Zhao, Founder and CEO of Binance, told users, “The issue is now contained. Your funds are safe. We apologize for the inconvenience and will keep you informed accordingly.”

Binance asked the validators of the affected network, who secure the system, to pause their work. Funds were taken from BSC Token Hub, a bridge that allows customers to transfer tokens tied to one chain to another. According to Zhao, the hack exploited a vulnerability that generated additional BNB tokens on the network.

Many of the world’s most widely used blockchains, such as Binance Smart Chain and Ethereum, run on separate technologies or use different tokens. This means that investors and developers cannot simply move their tokens to another blockchain for use or trading somewhere else.

Binance estimated that around $7 million of tokens had been frozen by the crypto community and its security operations.

Binance Smart Chain allows the world’s largest crypto exchange to open its doors to allow developers to build applications using smart contracts based on Binance’s own token. Binance launched the new chain in September 2020, at a time when the crypto industry was seeing widespread interest in decentralized finance projects.