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19 Oct 2022

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Another Major Crypto Hack led to a loss of $570 Million Worth of BNB Tokens

Binance, the largest crypto exchange in the world by volume, however, the giant suffered yet another security breach that resulted in the loss of $570 million worth of its native BNB token.

While there have been no official statements about the breach from Binance, the crypto exchange has disabled deposits and withdrawals as it investigates what happened.

According to Binance, it was discovered that the cross-chain bridge on the Binance platform was targeted. This enabled hackers to transfer BNB tokens from the exchange network. A cross-chain is a tool that makes it possible to transfer tokens between blockchains.

"An exploit on a cross-chain bridge, BSC Token Hub, resulted in extra BNB. As a result, we have asked all validators to temporarily suspend BSC," the Binance CEO, Changpeng Zhao commented in a Tweet.

"The issue is contained now. Your funds are safe. We apologize for the inconvenience and will provide further updates accordingly." BNB Chain resumed its operations shortly after that.

According to Binance's BNB Chain blog post on Friday, the hackers drained 2 million BNB tokens - about $570 million at current prices - from the network.

Cryptosecurity firm Immunefi says hackers forged transactions and sent money back to their crypto wallets due to a bug in the bridge's smart contract. With smart contracts on the blockchain, agreements can be executed automatically without human intervention.

According to CoinMarketCap data, BNB sank more than 3% Friday morning and reached $285.36 a coin.

An earlier estimate from the company put the total digital assets between $100 million and $110 million. However, with its security partners' help, the company managed to freeze $7 million of funds.

In a report to CNBC, a Binance spokesperson admitted that the company coordinated with BNB Chain validators to enact an upgrade. But, unfortunately, that meant that most funds remained in the hacker's crypto wallet while around $100 million was unrecovered.

Currently, there are 26 active validators on BNB Chain, and there are 44 in total in different time zones. Formerly Binance Chain, the BNB Chain was created by Binance in 2019. Like other blockchains, it features a native cryptocurrency called BNB, which can be used in games and other applications.

This hack is among the latest series of major hacks involving cross-chain bridges and poorly constructed systems.

According to statistics compiled by blockchain analytics firm Bitcoinist more than 1.4 billion dollars have been lost to hacking in cross-chain bridges since the beginning of 2022.

Cryptocurrency's been down; this year alone, the crypto industry lost nearly $2 trillion of its total value, which plunged from 2020-2021. Add that to the failing blockchain venture of Terra ($60 billion) and worsening macroeconomics, and you will see that things don't look bright!

Also, Read Pro-Russian Groups Use Cryptocurrency to Fund Military Operations and Evade United States Sanctions

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