Leading cryptocurrency marketplace Binance fell victim to an attack on its BSC blockchain last Thursday. Moreover, this makes the second largest hack Binance has undergone since its inception. However, the phisher stole approximately $570 million worth of tokens, according to Friday’s market fair value.
BSC Blockchain Experiences Hack
An existing loophole in the BSC bridge allowed a cyberpunk an easy break-in into the network. Consequently, a wad of funds amounting to millions of dollars got siphoned. The mainnet, which authenticates transactions, authorized the transfer of one million BNB tokens twice.
Changpeng Zhao, Binance’s CEO, noted the hack occurred on a cross-chain bridge dubbed BSC Token Hub. Due to this, new BNB tokens got minted. The BSC Token Hub connects BEP 2(BNB Beacon Chain) with BEP20(BNB Chain).
To interrupt the hacker’s operation, developers paused the BNB chain. Afterward, they shut it down, causing all ongoing deposits and withdrawals to fail. However, by morning on Friday, it was active again.
Slowmist, a digital asset security firm, reported on the situation. It affirmed that as soon as the attacker hit, Binance froze most wallets. Therefore, the hacker could not swipe more than $570 million off the bloc.
Binance released an update to notify users before freezing wallets. The exchange froze $7 million in tokens to secure them from getting taken. Following the hack, BNB’s price fell 3.5 percent in 24 hours.
It stepped lower to trade at $281 per token.
BSC Operation Resumes
Subsequent to launching software to block the attackers’ wallets, operations resumed on the BSC network. Deposits and withdrawals kicked off again at 06:40 UTC.
After activities began, Changpeng Zhao commended Binance’s team for professionally handling the issue. He praised them for the transparency, responsibility, and competence displayed. Accordingly, the team thanked Zhao for his support throughout the process.
Meanwhile, Binance technical group released a notice about a BSC on-chain oversight system. With the installation of the mechanism on the BNB layer, it could avert potential attacks.
Furthermore, validators will cast votes to decide on burning or freezing the stolen funds. If the decision to burn prevails, Binance will use the BNB auto-burn option. The vote will also include endorsing a white hat scheme to reward bug discoverers.
A sum of $1 million will be presented to anyone that locate a bug in the network. Also, it will introduce a bounty on hackers worth 10% of retrieved funds.
Hacks are a trending occurrence within the crypto space. Chainanalysis, an analytics company, released an update stating a series of attacks in 2022. According to it, hackers stole $2 billion worth of crypto across 13 different sectors of the industry.
Axie Infinity faced the most daunting crypto attack this year earlier in March. The mainnet is a gaming platform that supports blockchain-based games. Normad Bridge likewise fell victim to a hack that cost it $200 million.
Despite pledges of user protection by blockchains, regular attacks make it sound like a hoax.