Binance Hacked for $6.3 Billion as Bitcoin Drops 5 Percent

Bitcoin fell below $78,000 on October 30 after reports of a hack at Binance, the world’s largest cryptocurrency exchange. Reuters reported a six-week low during the early sell-off.

Binance estimates that about $6.3 billion in crypto assets was affected. The exchange says roughly $3 billion has been frozen and promises to cover the losses.

“Binance says a compromised employee laptop may have allowed an attacker to submit unauthorised withdrawals.”

The promise addresses the breach but offers no protection against a falling Bitcoin price. Someone holding Bitcoin elsewhere can lose money as the market drops, even if their coins remain exactly where they left them.

An attack on a major place to trade and hold cryptocurrency can shake confidence across the market. People may sell because they fear further losses or want less exposure while the facts emerge. Disrupted withdrawals can also prevent trading firms from moving funds between platforms.

Analysts interviewed by Reuters pointed to confidence, disrupted fund movements and the possibility of forced selling. The precise contribution of each remains uncertain.

The published preliminary findings concern Binance’s systems for approving withdrawals. Binance says a compromised employee laptop may have allowed an attacker to submit unauthorised withdrawals. Its investigation is continuing.

That concerns access to assets held by the exchange. It does not establish that attackers broke the Bitcoin network’s rules or rewrote its transaction record. A service that handles Bitcoin and the network recording Bitcoin transactions have different jobs.

Bitcoin is a digital asset that people can send to one another over a computer network. It began operating in 2009, following a proposal published under the name Satoshi Nakamoto. No central bank issues it.

The network keeps a shared public record of transactions, called the blockchain. Computers check transactions against its rules. Specialised operators called miners compete to add groups of transactions to the record, earning rewards and transaction fees.