It is nothing new when you read that a cryptocurrency was stolen or that a crypto exchange was hacked – wiping out millions of dollars in assets. Sadly, this is one of those common drawbacks to be expected in the cryptocurrency market. The latest to hit headlines in terms of trading volume will be the world’s largest crypto exchange, Binance whose BNB token was stolen last week and estimated impact is above $570 million. Binance is another example of a reality check in the crypto market.
Last week, on Friday, Binance Announced an exploit affecting the native cross-chain bridge between the BNB Beacon Chain (BEP2) and the BNB Smart Chain (BEP20 or BSC), called “BSC Token Hub”.
one in blog Post, Binance said, “a total of 2 million BNB were withdrawn. The exploit was through sophisticated forging of low-level proofs in a common library.”
On Friday, the BNB token traded on CoinMarketCap at a range of a little over $280 to $286. On the morning of October 7th, the coin touched $286.5 and if we take into account the 2 million BNB extracted by hackers – the loss is approximately $573 million.
Previously, Binance estimated that between $100 million – $110 million in funds had been withdrawn from BSC.
However, at 2.39pm on October 10th, the BNB token is currently trading at $273.70 on CoinMarketCap, down 1.26%. The Binance coin has taken a beating after the hack as BNB surged over 4% on a weekly basis.
Currently, BNB is the fifth largest cryptocurrency With a market valuation of over $44 billion.
The Changpeng Zhao-backed company has taken control of most of the money.
In the next move, Binance plans to conduct an on-chain governance vote to determine the following four actions for the common good of BNB:
– What to do, freeze or not to do with hacked funds?
– Whether to use BNB auto-burn to cover the remaining hacked funds?
– Received a WhiteHat program for future bugs, $1 million for each critical bug.
– Reward for catching hackers, up to 10% of the money recovered.
“The BSC validator voting function for consensus will become operational in the next few days through the upgrade of the BNB Beacon Chain,” Binance said.
What does Binance’s hack tell you about the crypto market?
Being in a nascent stage, cryptocurrencies are vulnerable to some exploitation or compromise, according to Dilip Seinberg, founder and CEO of Muffinpay, bill payment and utility Crypto. They are not completely safe from such activities. Although they do affect investor sentiment in the short term, if the coin is fundamental enough, one can hold on to the long run. However, ignoring the comment from the foundation or the magnitude of the exploitation becomes a concern.
He further added, such activities, in the long run, augurs well for the network, which intends to improve the ecosystem to make the network safe and secure for its users. In the fast expanding web3 world, keeping such elements away will be the need of the hour.
“The organization said that it will detail things after a thorough investigation into the matter, but so far, the hack affected the cross-chain bridge and compromised 2 million BNB tokens. Hack B&B Beacon Chain and BNB Smart Chain However, after contacting all the validators in 44 time zones, the situation was under control.”
The organization is also planning to introduce a new on-chain governance mechanism for better security in the future.
Also, to protect consumer funds in such incidents, the CEO of Muffinpay believes that there is a need for control and development of a system that is both centralized and decentralized.
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