tl;dr
Breaches of both Binance and Polymarket remind us all that crypto security must always remain top of our worry list.
Market Snap
Market Wrap
BTC’s price looked to be recovering from the hawkish Fed comments on Wednesday when Boom! – Binance announced a hack. We briefly broke $77k to the downside, followed by a minor recovery. The leveraged longs got killed of course. There is no doubt that an event like this is most unwelcome.
Occasional Series – Convicted Criminal Christine Lagarde
Lagarde is stepping down as President of the ECB nine months earlier than expected, for reasons she shared in her resignation speech:
“It is with great sadness that I have come to realise that the stablecoin revolution has made the concept of CBDCs redundant. I have dedicated my life to trying to enable governments globally to own and exercise total control over the plebs we rule, unencumbered by any pretence of democracy. That ambition and that dream now lie in tatters. I cannot continue.
I will now visit a pet shop to buy a family of kittens whom I can torture to relieve my great and heartfelt pain that cryptos will guarantee for everyone freedom, liberty, and privacy.
It did not have to be this way”.
Curious Cryptos’ Commentary – Binance
Binance announced overnight:
“Binance’s initial investigation suggests that the security incident may involve a compromised DevOps engineer’s laptop, which allowed an attacker to gain access to a service container and submit unauthorized withdrawal transactions”.
Binance says that is has found no evidence of the loss of any private keys.
The least surprising part of the story is that murderous dictator Kim Jong Un now has a fat bank account and is handing out cigars and whisky to the sycophants who support his oppression of the poor and starving North Koreans who make up most of that benighted country’s population.
In total, a whopping $6.3bn of funds is estimated to have been stolen, of which nearly $3bn have been frozen, mostly in USDT and USDC. Withdrawals have been suspended, but in an extraordinary display of hubris, deposits have been re-opened. Binance has promised that all losses will be made good.
…
Why does this matter?
Most importantly, the world becomes a more dangerous place every time that North Korea steals a dollar.
If the explanation for the hack is correct, then this looks like poor security protocols implemented by Binance, or a lack of adherence to such protocols by an individual. Or perhaps Binance or a supplier has unwittingly employed a North Korean hacker, a situation which is not uncommon, and one encouraged by the depressing growth in remote working.
It also gives me the opportunity to reiterate that the crypto assets you leave in the custody of a centralised cryptocurrency exchange should be limited to a small portion of your portfolio. Or use Coinbase, which has become the de facto custodian for institutions and the spot ETFs.
Curious Cryptos’ Commentary – Polymarket
Earlier in the day, Polymarket also suffered a breach, though not quite on the same scale.
In a similar story to Binance, Polymarket reported that one of its external providers had been compromised with nearly $3mm of users’ funds stolen. The vulnerability has been identified and fixed. Trading has resumed. All affected users will be made whole.
If you haven’t done it already, go check the balance of your cryptos on both Binance and Polymarket right now.