🌉 Binance's Bridge Breach

Oct 12, 2022

In a week where an explosion on a bridge linking Russia to Crimea rocked headlines, there was a bridge attack of a very different nature. The bridge in question is the BSC Token Hub cross-chain bridge, or, the bridge that allows the transfer of assets from the Binance Smart Chain (the blockchain used by Binance, the world's largest cryptocurrency exchange) to independent blockchains. Last week, hackers seem to have found a vulnerability that ultimately allowed them to take $100 million (or more) off this bridge. Binance, in response, suspended transactions and fund transfers while the issue was investigated. As TechCrunch notes, the hackers appeared to have minted $568 million worth of BNB tokens, but could only withdraw between $100 million and $110 million before the bridge was frozen.

Since the hackers used newly-minted tokens, no other users appear to have been affected.
"The issue is contained now. Your funds are safe. We apologize for the inconvenience and will provide further updates accordingly," Changpeng Zhao, Binance's CEO, tweeted Thursday.
This is not the first cross-chain hack either. TechCrunch details how some $2 billion worth of cryptocurrency has been stolen from cross-chain bridges this year.

Bridge Protocols

Blockchain data platform Chainalysis published a report back in August highlighting that cross-chain bridge attacks had become the most significant threat to blockchain technology. "Bridges are an attractive target because they often feature a central storage point of funds," the report says. Chainalysis recommends exchanges create "rigorous code audits" and "smart contracts." Binance explained "decentralized chains are not designed to be stopped," and, in the case of their own incident, it was only after "contacting community validators one by one, we were able to stop the incident from spreading."

The Verdict

Here is yet another example of how the Crypto market desperately needs regulation. But the question is, should the SEC oversee the technology running such exchanges? And, if so, how would they keep up with such fast-moving technology?