Robert Steinadler, 6 months ago
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?
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.
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.
Mar 16, 2023
Many people believe that Bitcoin is anonymous and that nobody can see who is behind each Bitcoin address. That is true to some extent but with blockchain analysis there is a tool available that can reveal the origin of funds. Most crypto companies use such services to block funds that originate from dubious sources such as Darknet marketplaces. Criminals are creative and responded with so-called Bitcoin tumblers to disguise their digital trails.
Mar 14, 2023
Most cryptocurrencies are open-source software and everybody is encouraged to develop them and search for vulnerabilities. Many cryptos rely on the work of volunteers that spend much of their time improving existing code or inventing solutions for problems that can be solved with blockchain technology. The motivation to dedicate time and resources can be very different. Some developers work because they believe in changing the world for the better. Others like to be recognized by their community and some are making a living by relying on bug bounties or grants.
Jan 24, 2023
Almost two-thirds of Dutch crypto owners do not have a backup of their crypto wallet. That is one of the interesting results of Multiscope's Cryptovaluta Monitor.
Dec 20, 2022
Quadriga was a crypto exchange headquartered in Canada. So far, nobody would have thought that anybody would ever hear again from the defunct company. The story goes back to the year 2018, and it involves India, a dead CEO, the exhumation of a body, and lost private keys holding crypto that was worth over $100 million at that time.
Sign up to stay informed via our email updates