Binance's $6.3 billion hack prompts rivals to tighten security

Dubai: Cryptocurrency exchanges are tightening their defences following Binance’s $6.3 billion (Dh23.1 billion) security breach, with Coinbase adjusting its safeguards and industry executives calling for faster warnings about attacks.

Coinbase said it had made precautionary changes to systems used to store cryptocurrency keys offline. In contrast, Kraken said it was monitoring security incidents across the industry for lessons it could apply to its own operations, Reuters reported.

The moves follow an attack on Binance that affected an estimated $6.3 billion in digital assets, prompting the exchange to suspend deposits and withdrawals temporarily.

Calls for faster security alerts

Star Xu, chief executive of cryptocurrency exchange OKX, called for a real-time alert system that would allow companies to share information as soon as an attack is detected.

The proposed system would help exchanges coordinate their response and temporarily freeze suspected stolen funds before attackers could move them elsewhere.

Security specialists also expect companies to strengthen employee training against social engineering, where attackers trick staff into giving them access to sensitive systems.

Binance’s preliminary investigation suggested the attack may have begun through a compromised engineer’s laptop.

Billions in assets frozen

Stablecoin issuer Tether said it had frozen nearly $1.57 billion linked to the incident, while Circle reported freezing another $800 million.

Binance separately said it had frozen about $3 billion in affected assets with help from blockchain partners. The figures may overlap and should not be added together.

Frozen assets have not necessarily been recovered or returned to customers.

Unlike stablecoins controlled by their issuers, cryptocurrencies such as Bitcoin and Ether cannot be frozen by a central authority.

Binance pledges to cover losses

Binance said it would cover losses using company resources and its Secure Asset Fund for Users.

The exchange also announced that it had set aside more than $6.34 billion in company funds and affected token assets to address the incident.

The breach has raised questions about how cryptocurrency companies protect customer funds as digital assets become more closely integrated with mainstream financial services.

In the UAE, Abu Dhabi’s Financial Services Regulatory Authority said on Friday that it was monitoring the Binance incident and engaging with the exchange.