North Korea Responsible for Crypto Theft from Binance: FBI

The US Federal Bureau of Investigation (FBI) has held North Korea responsible for the theft of virtual assets worth a record $6.3 billion from Binance, the world’s largest cryptocurrency exchange platform. The agency asserts that North Korean hackers are behind the incident.

Meanwhile, Binance has announced that it has already recovered 90% of the stolen assets by repurchasing them using its own funds, thereby compensating its customers for their losses.

In a statement released on Saturday (October 31), the FBI noted that North Korean cybercriminals are attempting to launder the stolen assets, primarily by converting them into the cryptocurrency Ethereum.

The US investigative agency has specifically identified a hacker group known as "TraderTraitor" as being responsible for this cyberattack. This same group was also linked to the theft of $1.5 billion in cryptocurrency from the Bybit platform in February of last year.

The FBI statement warns that the stolen assets may undergo further laundering through multiple stages. Consequently, the agency has urged virtual asset service providers to block suspicious transactions and has released a list of suspected digital addresses for monitoring purposes.

Separately, Binance stated on Saturday that it has covered the shortfall by purchasing new tokens equivalent to 90% of the stolen assets, utilizing the company’s own capital.

Binance explained that the remaining 10% of the stolen assets consist of tokens with lower liquidity, which may take more time to repurchase.

In a statement posted on the social media platform X, the company affirmed that it will continue to repurchase the remaining assets until the shortfall for all tokens is fully covered (100%). Binance will bear the financial loss resulting from the theft, ensuring that its customers do not suffer any losses. Binance utilized its $1 billion ‘Secure Asset Fund for Users’ (SAFU) to purchase tokens equivalent in value to the stolen assets. The company had established this Bitcoin reserve fund to address scenarios such as cyberattacks and ensure the security of its customers' holdings. Additionally, funds were drawn from a portion of the Futures Insurance Fund and the company’s own internal reserves.

Although Binance—the world’s largest cryptocurrency exchange—sought to reassure users that their funds remained secure, the cryptocurrency market experienced a decline on Friday.

On Friday, Richard Teng, a senior executive at Binance, described the incident as a sophisticated cyberattack. The attackers gained control of a laptop and employed specialized malicious software to erase evidence of their activities, making it difficult to trace the source of the attack or conduct an investigation.

Immediately following the breach, Binance suspended customer withdrawals. However, the company announced on Saturday that it plans to resume withdrawal services starting Sunday.

Furthermore, Binance has released a new accounting of its reserves, allowing customers to independently verify that the company holds assets at least equal in value to the funds deposited by its users. In essence, this provides a guarantee that for every asset held by a customer, Binance maintains an equivalent amount in its reserves.

Source: Al Jazeera