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Binance-linked wallet drained of $27 Million in Tether— How the hackers outsmarted the blockchain

TL;DR

  • A crypto wallet linked to Binance was targeted in a sophisticated heist, resulting in the theft of $27 million in Tether (USDT). Blockchain detective ZachXBT discovered the breach.
  • The stolen funds were converted to Ethereum and then to Bitcoin, using protocols like Fixed Float and THORChain. The wallet had received funds from a Binance withdrawal a week earlier and had past transactions with a Binance smart contract deployer.
  • This incident adds to a growing list of security breaches in the crypto industry, including recent hacks of Ethereum and DeFi platforms, and underscores the urgent need for improved security measures.

A crypto wallet associated with Binance has fallen prey to a sophisticated heist. The theft, totaling $27 million, was primarily in Tether stablecoins (USDT). Notably, the breach was unearthed by renowned blockchain detective ZachXBT.

The path of the stolen funds

The stolen funds were initially converted into Ethereum (ETH) through multiple protocols, including Fixed Float. Subsequently, these were then transferred to Bitcoin via the THORChain network. 

According to ZachXBT’s meticulous analysis, the wallet received these funds from a Binance withdrawal just a week prior. Moreover, in May 2019, the same wallet reportedly received transactions from an address marked by Etherscan as a Binance smart contract deployer. This detail adds another layer to the ongoing investigation.

The alleged attack took place yesterday, catching the crypto community off guard. It drained the wallet of its substantial USDT holdings, raising concerns about security measures.

Cyber attacks in the crypto industry 

This incident raises significant concerns regarding the security of digital assets. The ease with which the funds were diverted and laundered through various channels calls for reassessing current safeguards in the crypto space. Binance hasn’t given an update concerning these funds as of now. 

The crypto industry is no stranger to such breaches. Cryptopolitan reported yesterday that hackers are exploiting Ethereum’s CREATE2 opcode— which was meant to pre-determine contract addresses— for fraud and other illicit activities. This resulted in significant financial losses, with one user losing $927,000 worth of GMX tokens.

Also, Raft, a decentralized finance (DeFi) platform, was the target of a hack that resulted in the loss of around $3.3 million worth of ether (ETH). However, the attempt by the attacker to steal the funds led to an unexpected net loss of about 1,577 ETH from Raft.

In the Web3 Security Quarterly report for Q3 2023, Certik highlighted that this quarter has been the most eventful regarding security incidents, with a total loss of over $699 million across 184 incidents. This amount is significantly higher than the previous two quarters’ combined losses, which amounted to $320 million in Q1 and $313 million in Q2.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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