Bitcoin hits six-week low after $6.3B Binance hack

Bitcoin ↘ 0.60% fell to a six-week low after Binance, the world's largest cryptocurrency exchange, halted withdrawals following a hack it estimates affected about $6.3 billion in assets. Analysts say it is the biggest crypto theft on record. The fallout has spread past Binance itself. Institutional investors are rushing to pull digital assets off centralized exchanges, according to people familiar with the matter who spoke to CoinDesk.reuters.com+1

Prices slide across crypto

Bitcoin dropped more than 3% at its low, and ether Ethereum ↘ 0.66% slid to a two-month low before markets steadied. Binance's BNB ↘ 0.03% token also fell. Crypto stocks fell in extended trading. Coinbase ↗ 0.99%, which said it was not affected, dropped 4.8%, and Strategy ↘ 0.57% lost nearly 6%. Liquidations across the market reached about $1.5 billion, with most of the losses falling on traders betting on higher prices.coindesk.com+1

Geoffrey Kendrick of Standard Chartered expects prices to keep falling. He said a floor would form only after the frozen assets are released and more details come out. Tim Sun of HashKey Group said the breach "may further dampen risk appetite and prompt investors to reassess the safety of assets held on centralised exchanges".reuters.com+1

How the breach unfolded

Most of the theft took place in about 20 minutes starting late Thursday, October 29. Blockchain analysis firms TRM Labs and Chainalysis said they were highly confident North Korea was behind it. Binance said its initial investigation pointed to a compromised laptop belonging to one of its DevOps engineers. The exchange said it had found "no evidence of any wallet private key leak".coindesk.com+1

About $3 billion has been frozen so far. Tether froze nearly $1.57 billion in USDT, and Circle ↘ 0.47% froze more than $800 million in USDC USD Coin. Binance said it would cover losses through its Secure Asset Fund for Users and company capital, and that user funds are safe. It expects withdrawals to resume within 48 hours.reuters.com+1

Ripple effects beyond Binance

The disruption has reached other platforms. India-based CoinDCX put its futures market in "reduce-only" mode and confirmed that the reason was Binance's role as a liquidity provider. It is not yet clear how much institutions are withdrawing or where the money is going.cryptotimes.io+1

Some analysts see limits to the damage. "This is likely the largest crypto hack on record, but the key distinction is that it does not currently appear to be a solvency event for Binance," said Sean Farrell of Fundstrat.uk.finance.yahoo.com