Binance CEO Changpeng “CZ” Zhao shared this kidnapping story in a social media post last Friday. He revealed that the executives had been kidnapped during a business trip and forced to empty their crypto wallets, resulting in a total loss of about $12.5 million.
“We investigated the on chain activities and reached out to our partners earlier today to have the wallet frozen, as all of the funds were taken in USDT and transferred to a Tron wallet. We managed to freeze about $11.8m of the $12.5m stolen,” said Zhao.
On Saturday, Binance Customer Support explained in a social media post the exchange’s protocol for handling stolen funds sent to Binance.
“Depending on the information provided, Binance may grant a temporary courtesy freeze of any allegedly stolen assets … To keep the stolen assets frozen, you must provide a police report within 7 days after contacting Binance Support. Binance may extend the freeze period for you if you need more time to obtain a police report (on a case-by-case basis),” the post says.
When questioned about whether crypto is more secure than fiat currencies stored in banks, considering it can be frozen as well, CZ responded, “It’s a balance, and there is no perfect balance point. If you use XMR, then there isn’t much anyone can do (or to help you with), as far as I know. Bitcoin can be traced, but not frozen, until you send it to a CEX [centralized exchange].”
Recently, a wallet connected to Binance suffered a security breach, resulting in a significant $27 million loss in Tether stablecoins (USDT). The incident, highlighted by on-chain investigator ZachXBT, has sparked concerns in the crypto community. Binance has not yet issued an official statement about the breach and the resulting loss.
ZachXBT’s analysis shows that the hackers converted the stolen USDT funds into Ethereum (ETH). Afterwards, they laundered the stolen assets through THORChain, a decentralized liquidity protocol, eventually turning them into Bitcoin (BTC).
ZachXBT also found that the wallet had received funds from a Binance withdrawal a week ago. Similarly, in May 2019, the same wallet received funds from an address linked to Etherscan, a Binance smart contract deployer.
The incident reveals how hackers in the crypto space are using advanced methods to move stolen funds across different digital assets to hide their origins. As digital assets gain popularity, malicious actors continue to find ways to exploit weaknesses.
Earlier this year, CoinEx, a Hong Kong-based cryptocurrency exchange, faced an attack that resulted in over $27 million worth of digital assets like ETH, Tron (TRX) and Polygon (MATIC) being stolen from its wallets.
During the first half of 2023, the crypto industry faced losses totaling around $656 million due to hacks, scams and rug pulls.
ZachXBT has dedicated expertise to uncovering fraud, identifying scams and highlighting suspicious transactions. His efforts contribute to safeguarding investors, preventing illegal activities and promoting a more open and trustworthy crypto environment.
In February, ZachXBT assisted in investigations leading to the convictions of two people involved in the Platypus hack. This led to strong support from the crypto community, with numerous industry leaders donating and expressing admiration for ZachXBT’s work.
Zhao publicly praised ZachXBT and pledged $50,000 from Binance in support.
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