In the year AI re-wrote the infosec rulebook, it’s comforting to know crypto exchanges still have bad security

Binance freezes funny money after compromise of engineer’s laptop leads to $6.3 billion of bad trades

Crypto exchange Binance has paused trading after discovering unknown parties cracked one of its workers’ laptops and used it to make massive trades

Late on Thursday, US time, the company used its social media feeds to report “Our teams are aware of reports of a potential security issue and are actively investigating.”

The exchange insisted “User funds are completely safe” and warned its customers “should remain cautious of scams and should not trust unofficial links, messages, or requests for account information.”

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The company soon froze $2.5 billion worth of assets and warned that the figure could go higher “as our teams work closely with law enforcement, issuers, blockchain intelligence firms and industry partners to trace and freeze additional assets.”

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To prevent the matter worsening, Binance halted all trading, deposits, and withdrawals. It also promised to cover any losses.

About an hour ago at the time of writing, Binance posted an update on the incident that explains what it thinks went wrong.

“Binance's initial investigation suggests that the security incident may involve a compromised DevOps engineer’s laptop, which allowed an attacker to gain access to a service container and submit unauthorized withdrawal transactions,” the post states.

The company also hiked the amount it thinks is at risk to $6.3 billion and repeated its promise to cover any customer losses.

The update also says Binance found no evidence of any wallet private key leak, suggesting that customers’ holdings remain secure.

When they can use them again, as Binance is yet to resume trading.

Binance hasn’t explained how attackers gained access to the engineer’s laptop. The scant details provided make it hard to rule out a successful phishing attack, or perhaps a supply chain attack on a package the developer used.

Binance says it will spill once it knows exactly what happened.

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Cryptocurrency outfits have a long and inglorious history of falling victim to cyberattacks, perhaps starting with the 2011 raid on Mt Gox, to incidents allegedly perpetrated by nation-states, and, just last week, another situation possibly involving an AI-powered attacker. ®