Secret Service joins the hunt for Binance’s stolen crypto as Binance says it has begun recovering assets

The US Secret Service said it is helping to track funds stolen from Binance in the $6.3bn hack¹. Binance said it has started recovering some of the assets taken in the record heist³, and it is attempting to recover the full amount⁷.

Blockchain intelligence firm TRM said North Korea’s TraderTraitor hacking unit is responsible for the largest crypto theft on record². TRM said the hackers are using “never-seen-before laundering patterns” to hide the proceeds². Other blockchain intelligence firms have also linked North Korea to the attack⁸.

Binance describes the cyber-attack as complex, and it is believed to be the largest of its kind⁷. The exchange suspects the theft began on an engineer’s computer¹⁰, and the assets were taken in about 20 minutes⁵.

Why it matters to investors

Freezes by stablecoin issuers have limited how much of the loot the hackers can use. Tether said it froze nearly $1.57 billion related to the hack, and Circle froze over $800 million, for a combined $2.38 billion⁴. About half of the stolen assets were stablecoins that have since been frozen by issuers including Tether, Circle, Ripple and World Liberty Financial⁵.

Counts of the frozen total differ. One tally puts it at around $3 billion so far⁶, above the $2.38 billion attributed to Tether and Circle alone⁴. Freezes have also come from beyond the two largest issuers, as lending protocols and even an entire blockchain have frozen funds¹¹.

The hackers are moving what they can into decentralised finance¹¹, while TRM says they are using laundering patterns it has not seen before². The other half of the stolen assets were not frozen stablecoins⁵.

What to watch

Binance is racing to cover its losses⁹, and the pace of recovery³ will determine how much of the $6.3bn the exchange and its customers ultimately absorb¹.

The Secret Service’s involvement¹ adds a US law enforcement track to the work of private blockchain investigators^2,8. Coinbase chief executive Brian Armstrong urged people to help in whatever way they can³.

Binance’s history is part of the backdrop. Changpeng Zhao founded the exchange in 2017⁸ and stepped down as chief executive after pleading guilty to money laundering charges in the US¹. How regulators respond to the theft, and whether the frozen stablecoins can be returned⁵, are the next questions for the exchange.