Robert Steinadler, 2 months ago

Binance Smart Chain halted: Over 100 million USD lost in exploit

The Binance Smart Chain is the second most successful smart contract platform and has created a vibrant ecosystem of DeFi applications. Only Ethereum created a bigger universe of decentralized services and products. Yesterday, the BSC was suffering from an exploit of epic proportions and Binance called to the validators to undertake drastic measures.

How was the Binance Smart Chain hacked and how was the situation resolved?

Hackers exploit the cross-chain bridge

It is unknown who conducted the hack, but apparently, the BSC cross-chain bridge was exploited. A bridge is a smart contract that allows transferring digital assets between different blockchains. Bridges are considered to be more vulnerable than other smart contracts and have become a target for hackers who are basically looking at one giant jackpot when targeting a bridge.

According to Binance, the hacker managed to exploit the protocol and mint 2 million BNB with two transactions. As with all other hacks that happened with a bridge, the hacker then tried to move his stolen funds to other blockchains and layer-2 networks starting to convert them.

This is very typical and was also the same behavior during the Axie Infinity hack, in which more than $600 million were lost. The BSC hack almost broke that record, but luckily enough, the developers behind BSC found a method to stop the attacker that is causing controversy.

Binance Smart Chain was halted for several hours

In order to stop the hacker from moving the stolen funds, Binance called out to the validators to stop the whole blockchain. After the full stop, the funds were trapped and couldn’t leave the BSC. According to an official statement, the hacker was able to get away with about $100 million of crypto assets.

Through combined efforts in the industry, it was possible to freeze another $7 million in virtual assets that the hacker tried to launder.

User funds were not at risk, and the addresses involved are blacklisted by service providers and DeFi protocols. The Binance Smart Chain was restarted this morning after an update was deployed that prevented the exploit from happening again. Now that the dust has settled, many observers and experts are asking if this was indeed a success. Blockchain technology is supposed to be resilient and censorship-resistant. By stopping a blockchain to prevent transactions from happening, Binance has pretty much proven that BSC is not holding up to that spirit.

On the other hand, Ethereum also took action in 2016 by forking its blockchain in order to reverse the DAO hack. It is not an easy decision, but eventually, decentralized finance needs a standard in which malicious or disputed transactions can be reversed. Three researchers from Stanford suggested a new token standard that would make this possible and implement an effective countermeasure to hackers and exploiters.

Featured articles
Four trading strategies for crypto
Bitcoin and Ethereum: what are the differences?
What determines the Bitcoin price?
Related articles
A trace on the blockchain: 10,000 Bitcoin related to Mt. Gox on the move

Nov 24, 2022

In 2014 Mt. Gox which was the biggest Bitcoin exchange world wide at that time went bankrupt. The aftermath was a disaster since the platform got hacked earlier and an amount of 744,408 BTC left a gigantic hole in the company’s balance sheet. Over 8 years later some of these stolen coins are all of a sudden on the move.

Trade anytime, anywhere

Boost your trading impact and reaction time in over 80+ cryptocurrencies via instant access to your portfolio with the LiteBit app.

  • 2525 Ventures B.V.
  • 3014 DA Rotterdam
  • The Netherlands
More info
  • About LiteBit
  • Careers
  • Business account
  • Support
  • Sell
  • News
  • Education
Subscribe for updates

Sign up to stay informed via our email updates

Subscribe
Explore popular coins
© 2022 LiteBit - All rights reserved