In the wake of a staggering $6.3 billion cyberattack, Binance has discovered additional security breaches during its ongoing investigation, beyond initial suspicions surrounding an employee’s laptop. Binance executive Richard Teng announced plans to reinstate withdrawal services by Sunday, following a comprehensive security overhaul.
Unraveling the Attack’s Complexity
Richard Teng revealed that the attackers employed a self-destruct mechanism to erase their tracks and exploited the EIP 7702 account authorization feature on the Ethereum network to seize control of a hot wallet. He noted that this tactic bypassed Binance’s standard approval processes, highlighting the sophisticated nature of the intrusion.
Richard Teng emphasized the complexity of the attack, noting, “Despite identifying additional breach points, the precise sequence of events remains undetermined.”
Investigators are focusing on how the attackers managed to gain wallet permissions and rapidly deplete assets using malicious code. Initial findings suggest a significant portion of the losses occurred within minutes.
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Aiming for a Swift Recovery
During the reconstruction and testing of its infrastructure, Binance has temporarily suspended withdrawal operations. Teng explained that cloud systems, employee devices, private key management, and transaction signing processes are being reviewed, with an aim to resume withdrawals in approximately 40 hours.
Teng stated, “Binance will issue an initial proof-of-reserves update by Monday, and is actively collaborating with law enforcement, blockchain analysts, and token issuers to reclaim the stolen assets.”
Addressing Losses and Reserve Controversy
Binance has committed to covering the entire $6.3 billion loss from company reserves. Reports indicate that over $6.34 billion was allocated for this purpose, with $5 billion already held in the affected cryptocurrencies. The remaining balance is being procured via exchanges and over-the-counter markets.
Teng clarified that the attack targeted Binance’s hot wallet, not client funds. However, a separate reserve data audit revealed that the compromised wallets were previously listed among assets supporting client balances.
The forthcoming reserve update and detailed technical report from Binance are expected to resolve lingering uncertainties about the extent of losses and the status of affected wallets.
