‘Isolated…’: Assets platform Binance on $100 million cryptocurrency scam

In what is being termed as the most damaging cryptocurrency scam, the world’s biggest exchange for crypto assets—Binance was reportedly said to have been duped of cryptocurrency worth roughly $100 million on Friday.

However, the company has now distanced itself, saying that the loss is on BNB Chain, and users are not affected. It said that BNB Chain is powered by BNB that is neither run nor owned by Binance.

In an email response to the Hindustan Times, the Binance spokesperson said, “This incident is isolated to BNB Smart Chain (BSC). Everything occurred on the decentralised blockchain (BNB Chain), and neither Binance users nor any other users were involved.”

The statement further added Binance exerts no control over BNB Chain, and it is a community-driven and decentralised blockchain, powered by BNB that is neither run nor owned by Binance.

Experts say that it is the biggest scam in cryptocurrency history second only to the Axie Infinity blockchain game hacking, which costed more than $500 million in late March this year, allegedly by a North Korean group.

What is the issue?

A total of 2 million BNB (nearly $570 million) were effectively minted and taken by the hacker. But with the efforts of volunteers, roughly 80 per cent had been frozen immediately, and the damage had been limited to less than $100 million.

The issue surfaced when in a tweet Binance chief Changpeng Zhao wrote that an exploit on a cross-chain bridge (the means used by investors to move assets from one blockchain to another), 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 apologise for the inconvenience and will provide further updates accordingly.” Zhao tweeted.

In another tweet, he estimated the loss to be around $100 million, comparing it to about a quarter of the last BNB burn.

In response, the Binance spokesperson has claimed that the company exerts no control over BNB Chain. It added that although initially the Binance community supported BNB Chain but now, the latter has been running independently.

What does the BNB Chain say?

On the other hand, BNB Chain in its official statement acknowledged the incident and regretted the exploit. It further added that in coming days, it will have on-chain governance votes to determine:

What to do with the hacked funds, freeze or not to freeze?

Whether to use BNB Auto-Burn to cover the remaining hacked funds, or not?

A Whitehat program for future bugs found, $1M for each significant bug found.

A Bounty for catching hackers, up to 10% of the recovered funds.