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One of the longtime allures of crypto as an investment was that it was more secure than, say, leaving money in the bank.
But in the wake of the huge Binance hack, the crypto faithful are questioning that selling point. Though hackers have become more sophisticated with the use of AI, even the banks may not be super-safe, Binance founder Changpeng Zhao contends.
"I think this is definitely a landmark moment. Trust will be shaken a little bit, but it's how we handle the issue that's important," Zhao, better known in the crypto community as CZ, said at Yahoo Finance Invest. "We as an industry need to build that confidence back as a company, as an industry. This has wider impact to the industry, but not just for crypto, but also potentially the global [financial] system. I've heard so many people worried about the banking system. So if they can hack a crypto exchange, the banks are probably getting hacked left and right."
Binance is the world's largest cryptocurrency exchange, holding approximately $171 billion in total assets on its platform. The company is led by co-CEOs Richard Teng and Yi He.
CZ stepped down as Binance's CEO in 2023 after the Justice Department charged him with running a financial platform without basic anti-money laundering safeguards following a years-long investigation. CZ served four months in federal prison and was released in September 2024. In October of the following year, President Trump signed a full pardon for Zhao.
Zhao, who's worth a reported $65 billion, remains a major shareholder and the public face of the platform.
Hackers drained roughly $6.3 billion worth of digital assets from Binance on Oct. 29.
Blockchain intelligence firms and the FBI attributed the 20-minute raid with high confidence to TraderTraitor, an elite state-sponsored cyber unit tied to North Korea.
North Korea reportedly denied involvement.
Rather than cracking private cryptographic keys, the attackers reportedly breached internal automated transaction workflows via a Binance employee's laptop.
Binance moved swiftly to stabilize the situation by guaranteeing full customer restitution, deploying corporate treasury reserves, capital from its Secure Asset Fund for Users (SAFU), and insurance funds to replenish user balances.
Zhao added, "The banks, they may have to report to the regulators, but they may or may not have to be public about it. So you may not even find out until like six months later. So, this also shakes the core of any sort of financial system, to be honest. I think any financial service platform needs to take this moment very seriously. This is a kind of an inflection point where AI can be used very effectively against financial institutions, and we need the defense for it."
