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- Binance, the world's largest cryptocurrency exchange, was forced to stop deposits and withdrawals due to an attack
- BNB is the fifth largest cryptocurrency by market cap, with 2 million BNB tokens hacked, worth $570 million.
- The hacker took advantage of a vulnerability in the BNB network, which covers news across the crypto space.
Another major development in the crypto space was when the world's largest cryptocurrency exchange by trading volume experienced a serious network issue. Hackers have siphoned 2 million BNB (already generated), the main token of the Binance network, due to a vulnerability that puts around $570 million at risk.
It's been a tumultuous year for cryptocurrencies, with many cryptocurrencies losing over 70% of their value since early 2022. As we assess the latest crypto scam in a series of hacks, thefts, and scams, let's break down and uncover this BNB hack. . Find out what this means for the cryptocurrency space.
What happened to the BNB hack?
Binance Coin (BNB) is the cryptocurrency that powers the BNB blockchain ecosystem and is the official token of the Binance cryptocurrency exchange. The token was initially launched on the Ethereum blockchain and later migrated to the Binance Smart Chain, now known as the BNB chain. The BNB chain consists of the BNB Beacon Chain and the BNB Smart Chain (BSC).
At first, $100 million was reported to have been pirated, and then that number grew exponentially. About 2 million BNB tokens (worth about $570 million) were mined. Binance co-founder and CEO Changpeng Zhao (“CZ”) announced that the attack occurred on a cross-chain bridge where users transfer digital assets from one blockchain to another. The hackers managed to generate 2 million BNB coins for free. An attacker exploited a vulnerability in Binance Bridge and sent them 1 million BNB coins twice in a row. The attack was caused by a bug in a smart contract that hackers could use to transfer transactions and funds to their wallets.
The Binance CEO tweeted that the current impact is estimated to be around $100 million, as most of the stolen coins cannot be transferred off the BNB chain. All listeners were asked to temporarily suspend the BSC, which helped contain the issue. BSC confirmed that as soon as the problem was discovered, it arranged to shut down the entire blockchain and the auditors acted quickly. There are a total of 44 different validators on the BNB network, of which 26 are currently active. Validators are responsible for approving transactions on the blockchain.
The Binance CEO wrote on Oct. 6:
“The cross-chain bridging activities of BSC Token Hub led to the rise of BNB. We have asked all verifiers to temporarily suspend the BSC. The case is now closed. Your funds are safe. We apologize for the inconvenience and will provide more information. Updated accordingly."
He then went on CNBC on October 7 to further explain the situation and assure BNB holders that their money was safe.
What happened to BNB?
BNB prices fell slightly on Friday after the attack on Thursday night. The good news is that the entire blockchain did not crash, as the problem was contained and resolved almost immediately when the blockchain was complete with validators working together. Also, BNB holders collectively did not lose $570 million, as media headlines can be misleading.
The hackers would have stolen about 110 million dollars instead of the 570 million dollars then. Blockchain managed to freeze another $7 million with the help of security partners. The Binance Smart Chain community will now hold a vote to decide the next step. A donation is being discussed to freeze the stolen funds and catch the perpetrators of this hack
On the morning of October 9, BNB, the fifth largest cryptocurrency by market cap, was valued at $278.14, down 46.34% by 2022.
It should also be noted that the cryptocurrency market in general is down due to the release of trade data. Many cryptocurrency advocates initially argued that digital assets could be independent of systemic economic problems, but this was not the case as we saw cryptocurrency prices plummet on major economic announcements. How price increases affect the stock market.
What does this mean for cryptocurrencies?
It appears that the BNB hack was an isolated incident and there were no other hacks in the crypto space at this time. This seems to be a case of unorganized crime , something more opportunistic if not less serious. The attacker was able to exploit a vulnerability in the BNB network due to cross-chain bridging and other coins were not affected. However, many crypto experts (including Ethereum founder Vitalik Buterin
Transactions in decentralized finance (DeFi) are regulated by code, and the process appears to have many vulnerabilities. If these security limitations are addressed immediately, this hack may inspire others to test similar vulnerabilities in the future.
The sad news is that this hack only adds fuel to the uncertainty in the cryptocurrency space that many investors are concerned about. There are many barriers to entry in the mass adoption of cryptocurrencies and this will certainly raise a lot of questions about switching to digital currency.
Any other coding issues worth knowing about?
It has been an eventful year in the crypto space, with many major coins falling in value by as much as 80% since the beginning of 2022. There are also major hacks and disasters to sort out. It is estimated that around $2 trillion in value was wiped out of the cryptocurrency ecosystem after the 2020 and 2021 rallies, which pushed the price of the token even higher.
Luna's collapse wiped out almost $60 billion from the crypto ecosystem. This sent shockwaves through the crypto space as it became clear that even a stablecoin like USDT could crash as many people lost their life savings.
Chainalasys confirmed in August that $2 billion worth of crypto was lost due to the bridge crossing. The theft occurred at more than 13 different bridge breaches along the chain. It is estimated that 69% of the money stolen in 2022 will be from bridge attacks. The report also mentions disturbing news that hackers linked to North Korea have already stolen $1 billion worth of crypto this year.
And we can't forget Kim Kardashian and the issue with the SEC where she was fined $1.26 for not disclosing that she was paid to promote EthereumMax on her Instagram page. All of this news is negative publicity for the crypto space, as rumors of impending regulations swirl. And soon, due to all these issues, it costs users money.
How to invest?
While we understand the benefits of investing in digital assets, as some experts believe that this online currency is the way of the future, there are still some serious risks involved in investing your money in this industry. We cannot deny that the sector has suffered great losses this year. We don't want to see you lose your hard-earned money.
For now, serious investors are willing to wait for this phase of the crypto wild west and its obvious flaws to be over, as they are bullish on the long term.
If you want to invest in the cryptocurrency space, you might consider an investment kit like the Crypto Kit or the Emerging Tech Kit. These groups not only invest in a single coin or company, but also help spread risk across the ecosystem. of coverage. Both use artificial intelligence to assign portfolio weights to four heads each week: crypto, tech ETFs, big tech, and small tech. Regardless of the sector you invest in, users can activate portfolio protection at any time to protect their profits and minimize losses.
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The main risk you face when investing in digital assets is that the space is unregulated, which can lead to hackers trying to exploit this space. With cryptocurrency prices down, a recovery in 2022 does not seem imminent. We encourage you to do your own thorough research before investing your money in risky assets, because you don't want to lose everything you've worked for.
Download Q.ai today to access AI-powered investment strategies . When you deposit $100, we add an additional $100 to your account.