On the 6th of October, Binance announced a temporary pause in the Binance Smart Chain (BSC) due to irregular activity. This was amid rumors that the smart contracting platform has been reportedly hacked and over two million BNB, the native currency of the Binance ecosystem, illegally transferred to an external wallet. Considering its dollar equivalent, this is one of the biggest hacks to ever occur in the crypto space.
Due to irregular activity we're temporarily pausing BSC. We apologize for the inconvenience and will provide further updates here.
Thank you for your patience and understanding.
— BNB Chain (@BNBCHAIN) October 6, 2022
The hack was suspected to have taken place on the Binance Bridge, a cross-border portal allowing agents to directly move tokens between protocols, therefore impacting BSC. And since BNB is the priming agent of the Binance ecosystem, Binance took the decision to temporarily pause the network as it sought for mitigation.
As of early October 7, the wallet of the suspected hacker has been identified. Furthermore, it was revealed that over half of the funds stolen had been moved to a BSC-based DeFi protocol, Venus. Therein, the hacker leveraged stablecoins before moving them to other chains through the Stargate Bridge.
At first, I thought that @VenusProtocol had been hacked yet again. However, it only took a couple seconds to determine that the attacker *really did* deposit over $200M USD into Venus
Instead, I needed to figure out where those funds came from pic.twitter.com/kNHp2k7aOt
— samczsun (@samczsun) October 6, 2022
The USDT wallet associated with the hacker has since been blacklisted.
According to a Twitter user, the hack on the BSC cross-chain bridge was possible because of a bug in the proof verification code. This flaw permitted attackers to forge two arbitrary messages and thus take charge of BNB, siphoning them to third-party blockchains, outside of the Binance ecosystem. Analysts now say had Binance swung into action, the damage could have been far much worse.
Binance suspended all deposits and withdrawals on the BSC as an investigation into the incident is ongoing. Many people intend to get their funds out of the BNB ecosystem, but the Binance team has reassured all users that all funds are safe.
The platform creator has also appreciated all its node service providers for their prompt action and helping mitigate further losses.
As of late October 7, BSC had been reactivated and the platform working as normal.