Binance halts blockchain after reports of a potential hacking attack

The Binance Coin (BNB) blockchain was put on hold yesterday after reports of potential problems with the 'cross-chain bridge', a critical component of the token network of the world's largest crypto exchange. Hackers allegedly made off with $110 million in BNB tokens.

Hacking attack by issuing additional tokens

The blockchain's operations were halted after a post on its official Twitter account justified the decision with "irregular activity". This was followed by an announcement that technicians were working to restore network operation.

Twitter had already been hit by rumours of a major cyber attack, which was said to be worth around BNB 2 million, or almost $600 million. Later, however, a leading developer of the cryptocurrency's blockchain confirmed that the attack had taken place, but that the value of the lost funds was between $100 million and $110 million.

The most likely exploit (the use of bugs in the code) involved attacking the BSC Token Hub and creating additional coins. According to an official statement from Binance, customer funds are safe, and the exchange itself in particular was exposed to the loss, as it was still exchanging the newly created tokens for stablecoins USDC, USDT and BUSD for some time. Hackers then had them exchanged for the equivalent of $57 million in Phantom, $53 million in Ethereum and $400k in Polygon and... disappeared.

Binance Coin drops after the attack

Binance Coin is the third token in the world in terms of market capitalisation (not including stablecoins) and is an important part of crypto world transfers, especially between exchanges.

Moments after the first news of the attack on the BNB blockchain, the token dived more than 5 per cent (to $277.5) within two hours, before rebounding and stabilising around $284. At the same time, according to CoinMarketCap data, BNB's trading volume increased by as much as 62.5 % over the past 24 hours and surpassed $1 billion, as uncertainty over the security of the coin grew.