Binance’s Zhao says ‘no 100% security’ after $6.3B hack

Binance co-founder Changpeng Zhao said users of the world's largest cryptocurrency exchange lost nothing in last week's roughly $6.3 billion hack. He also warned that artificial intelligence is making attacks like it easier. "There's no 100% security," Zhao told Yahoo Finance on Tuesday, November 3. "So when you run a platform, especially a crypto platform the possibility is always there. I did not think it was going to be this big of magnitude, probably not."finance.yahoo.com

His comments came as Binance released its first detailed account of the October 29 breach, which the FBI has blamed on North Korea. Analysts have described the theft as possibly the largest financial heist on record.

Withdrawals back, losses absorbed

"Right now the withdrawals have been restored, the systems back to normal," Zhao said, adding that "all user funds are covered. The users did not suffer any loss," according to Yahoo Finance. Zhao said he no longer runs the company, but as a shareholder he quickly made clear that users would be made whole, Stocktwits reported.stocktwits.com+1

Binance froze withdrawals for more than two days and began reopening them in phases on Sunday, November 1. Customers pulled out a net $3.6 billion on the first day, BBC News reported. The exchange said it had replaced about 95% of the stolen assets using its corporate treasury, its Secure Asset Fund for Users and insurance funds, according to CoinDesk. By Tuesday, hourly deposits had started to exceed withdrawals, the exchange said in its incident report. That report said the attack began with a fake job interview aimed at one of its engineers.bbc.co.uk+2

The FBI attributed the theft to TraderTraitor, a group backed by the North Korean state. Stablecoin issuers including Tether and Circle froze about half of the stolen assets, The Daily Star reported.afp.com+1

AI as an attacker's tool

Zhao said the risk goes well beyond Binance. "This is every crypto platform, every wallet service, every bank, every financial institution that you use," he said in the Yahoo Finance interview. "Especially now with AI improving so quickly, I think we're going to see a lot more of this." He argued that AI "is just making hacking so much easier now," because it can search code for bugs more thoroughly than humans can, while doing little so far to improve defense.finance.yahoo.com

He made a similar point to CoinDesk. "For attack, you only need to find one crack. To defend yourself, you need to find all the cracks and then fix them," he said, adding that banks are "in a worse position" than crypto exchanges. Investigators have found no evidence that AI agents laundered the stolen funds, CoinDesk noted.coindesk.com

BNB ↘ 1.39% edged lower on Tuesday, and Bitcoin ↘ 0.86% stayed below its high for the week, Stocktwits reported. Zhao's answer is for defenders to adopt the same tools. "The whole global financial system need to catch up on the AI defense," he said, "and we have to use AI as well."stocktwits.com