Crypto Thieves Exploit Blockchain Bridges to Snatch $100Mn From Binance-linked network

Popular cryptocurrency exchange Binance was forced to temporarily halt operations due to an attack. The exchange has clarified that hackers discovered and exploited a loophole in its Smart Chain (BSC) blockchain network to steal $100 million worth of cryptocurrency. The theft might even turn out to be rewarding for the hackers. And it also highlights the weakness in the distributed ledger system of blockchain verification.

The attack on the crypto exchange was carried out on Thursday, October 6 at 2:30 PM (EST). Hackers successfully compromised BNB Smart Chain, a critical technology for the Binance Coins (BNB), to siphon off an estimated $100 million worth of digital tokens.

An exploit on a cross-chain bridge, BSC Token Hub, resulted in extra BNB. We have asked all validators to temporarily suspend BSC. The issue is contained now. Your funds are safe. We apologize for the inconvenience and will provide further updates accordingly.

— CZ 🔶 Binance (@cz_binance) October 6, 2022

The theft was successful, as the attacker's digital wallet received not one but two hefty transactions. In an attempt to ensure the funds are difficult to recapture, hackers even started redistributing the ill-gotten digital coins using a variety of liquidity pools. However, Binance has been in pursuit and has managed to freeze about $7 million worth of crypto assets.

The rest of the loot might take a little longer to recover. Some of the coins should make their way back to Binance primarily because the exchange had quickly and openly acknowledged the theft and asked all validators to suspend the Binance Smart Chain. The platform, however, estimates that between $70 and 80 million may have been fully liquidated, making recovery very difficult, if not impossible.

Attack Highlighting Weakness Of Blockchain Bridges

The Binance cryptocurrency exchange has resumed operation, and all transactions including fund transfers, have resumed. The platform even confirmed that it has deployed "fixes to stop hackers from getting in". However, the theft has once again highlighted the weakness which is commonly exploited.

📢BNB Smart Chain (BSC) is running ok from 20+ mins ago.

The validators are confirming their status and the community infrastructure are upgrading as well.

— BNB Chain (@BNBCHAIN) October 7, 2022

Hackers exploited BSC Token Hub cross-chain bridge to successfully pull off the hack. These "Cross-Chain Bridges" essentially offer cross-platform connectivity and exchange of cryptocurrency and digital assets. Basically, they allow cryptocurrency owners to buy or exchange crypto coins and NFTs from one blockchain to another.

Cross-chain bridge hacks are becoming a preferred point of attack for hackers. This is primarily because there are multiple parties, exchanges, cryptocurrencies, government-back fiat currency, and digital assets such as NFTs involved. With so many aspects, hackers have a lot of potential ways of sneaking in and stealing part of the crypto assets being traded.