Binance hack, and what it can mean for Bitcoin's operators.

[CTO114]

We all witnessed the development and story of how about $6.43 billion dollars was stolen from Binance. And one can't help but extract s :)ome useful lessons from the incident.

The recent development is that about 44% of the funds which were stolen have been frozen. This was possible because stablecoin users had it in them to intervene. An impressive move, but this same move explains that crypto can be contradicted.

Firstly decentralization. Dentralization is one interesting topic here, we always speak about it. One thing is looking certain, some of the biggest assets in the industry assets will be dependent on central authorities for transactions to be authorized and go through.

Now to Bitcoin, what we saw happen can't happen with Bitcoin. No one can simply contact a Bitcoin issuer to freeze an address because there's no central issuer. Now on the other side, this freedom however makes recovering Bitcoin in the case of theft very difficult.
This is not to talk down Bitcoin, but a gentle reminder that there has to be a separation between the technology of Bitcoin and the other custodian people use to get access.

Crypto definitely has to overcome the challenge of security, trust and accountability, not just the issue of adoption.

Hope we don't get to see where the fast growing decentralized system still rely on centralized institutions for protection!

[348Judah]

We all witnessed the development and story of how about $6.43 billion dollars was stolen from Binance. And one can't help but extract s :)ome useful lessons from the incident.

Useful lessons like don't continue to play dumb by having your coins on a centralized exchange, this my just be a warning signal to those that were not affected users, maybe the big one is coming sooner and this may not have to be on binance any longer but on anything realize exchange to completely go down.

Now to Bitcoin, what we saw happen can't happen with Bitcoin. No one can simply contact a Bitcoin issuer to freeze an address because there's no central issuer. Now on the other side, this freedom however makes recovering Bitcoin in the case of theft very difficult.
This is not to talk down Bitcoin

What makes you think this cannot by means, when we already know that centralized exchanges harkened to the prompt from central authority like the governments, which is their main custodial that determine on what they should operate on, government can definitely decided to freeze users account for any reason and the exchange will be subjected to that procedure without hesitation, the moment the interfere into the case, all they do is to confisticate the coins and put it in their possession.

[freedomgo]

Before USDT was born, there were already hacks happening on exchanges and thousands of Bitcoins were lost, and yet the market still survived. If Bitcoin was going to die it should have died during the early stage, so since Bitcoin has already reached this level where even institutional investors are adopting it, I don't think the recent hacks will change how they see Bitcoin. In fact, if you read the news, there are institutional investors still buying at this time, we have Strategy and Strive, both have billions of dollars in Bitcoin holdings.

[SeriouslyGiveaway]

Before USDT was born, there were already hacks happening on exchanges and thousands of Bitcoins were lost, and yet the market still survived. If Bitcoin was going to die it should have died during the early stage, so since Bitcoin has already reached this level where even institutional investors are adopting it, I don't think the recent hacks will change how they see Bitcoin. In fact, if you read the news, there are institutional investors still buying at this time, we have Strategy and Strive, both have billions of dollars in Bitcoin holdings.

Hacked exchanges since 2011.
[Updated] List of cryptocurrency exchange hacks.
Documented timeline of exchange hacks.

Bitcoin is Bitcoin and the Bitcoin dominance in cryptocurrency market is enough to show how big and important Bitcoin is in this industry and market. The most severe hacks and consequences are from hacks with main funds in Bitcoin. If hacks are in altcoin blockchains and altcoins, effects are still negative but expectedly smaller.

[GreatArkansas]

I'm curious if there was no frozen assets happened? I think the dump happened to market overall would be the same. Some may consider this as one of the good things of these centralized entities, but still, for just this scenario. It just shows you don't really at first time you deposited your Bitcoin to a centralized exchange = it's not yours anymore. If your BTC is still sitting on Binance, then you are under that same custodian risk; it's still the same.

[SeriouslyGiveaway]

I'm curious if there was no frozen assets happened? I think the dump happened to market overall would be the same. Some may consider this as one of the good things of these centralized entities, but still, for just this scenario. It just shows you don't really at first time you deposited your Bitcoin to a centralized exchange = it's not yours anymore. If your BTC is still sitting on Binance, then you are under that same custodian risk; it's still the same.

Recent years, if hacked funds are moved by stablecoins, they will be frozen very quickly by centralized exchanges. Stablecoin freeze is not new, it was already applied years ago but recent years with more regulations and stricter enforcement of AML, stablecoin issuers have to freeze hacked funds very quickly if they don't want to have legal problems.

Since 2019 PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets.
Stablecoins and blacklists.

[YellowSwap]

I am not one of them but the Aftermath is what many people are most concerned about, Binance got hacked and we keep telling them not to keep their funds on Binance exchange but they got their funds back.

If their funds were sitting in their crypto wallets and it got drained who is going to pay them back? This exact reason is why they will never change, the part of them getting paid back is more than enough reason why they won't change.

I've stopped telling people what to do, most of them make their choices base on this reason and it's working for them, everything still has to do with lack of taking responsibility themselves, they are too scared of losing their coins.

[freedomgo]

I'm curious if there was no frozen assets happened? I think the dump happened to market overall would be the same.

As long as Binance is able to compensate for the losses, the amount lost might not be relevant.

Documented timeline of exchange hacks.

This is very detailed. Thank you.

[Hewlet]

Hope we don't get to see where the fast growing decentralized system still rely on centralized institutions for protection!

'In the same way, we have been hammering on the fact that leaving your asset in the custody of an exchange is not the right thing to do and when incident like tis happens, the ones that are wise enough tend to learn their lesson and take the necessary step. convenience is good but it comes with a cost.

The only reason why this is not seen to be something really extreme is that Binance was able to cover up for all affected funds through their balance sheet and we can see people that were actually affected at this point.  bitcoin is not 100% void of lapses especially in a time when hackers are on the increase. relying on exchange to protect your asset is same as still following decentralized means of taking care of your asset.

[Basels]

I am not one of them but the Aftermath is what many people are most concerned about, Binance got hacked and we keep telling them not to keep their funds on Binance exchange but they got their funds back. If their funds were sitting in their crypto wallets and it got drained who is going to pay them back? This exact reason is why they will never change, the part of them getting paid back is more than enough reason why they won't change.

I've stopped telling people what to do, most of them make their choices base on this reason and it's working for them, everything still has to do with lack of taking responsibility themselves, they are too scared of losing their coins.

Yeah, Binance, Bybit and Bitget users have been lucky. We wouldn't say the same for FTX, so everyone should know that the risk is still there putting funds in exchanges. Nevertheless, the days are gone when everyone thought that custody risk is limited to custodial entities. Even self custody has been reasonably demystified with the Coldcard hack, so I would advocate spreading your risks between more than one wallet.

[m2017]

We all witnessed the development and story of how about $6.43 billion dollars was stolen from Binance. And one can't help but extract s :)ome useful lessons from the incident.

Why just "witnesses"? They are participants, as many of them are users of this exchange. Furthermore, binance halted withdrawals for a period of time, which directly affected its users, that is certainly more than just being a "witness". And had the exchange lacked a reserve fund, the theft would have hit the "wallet" of every single user.

The recent development is that about 44% of the funds which were stolen have been frozen. This was possible because stablecoin users had it in them to intervene.

What will the critics of centralization say to this? How would they react if a "freeze" on funds helped to save and preserve THEIR money?

An impressive move, but this same move explains that crypto can be contradicted.

It has long been no secret that many cryptocurrencies merely "mimic" other crypto.

Firstly decentralization. Dentralization is one interesting topic here, we always speak about it. One thing is looking certain, some of the biggest assets in the industry assets will be dependent on central authorities for transactions to be authorized and go through.

Good morning to you.

Now to Bitcoin, what we saw happen can't happen with Bitcoin. No one can simply contact a Bitcoin issuer to freeze an address because there's no central issuer. Now on the other side, this freedom however makes recovering Bitcoin in the case of theft very difficult.
This is not to talk down Bitcoin, but a gentle reminder that there has to be a separation between the technology of Bitcoin and the other custodian people use to get access.

This serves as a reminder that there is no such thing as a perfect (financial) "tool". Each one has both advantages and drawbacks that must be taken into account.

Crypto definitely has to overcome the challenge of security, trust and accountability, not just the issue of adoption.

That’s already been decided. In the case of crypto, just stop keeping your assets in places that are vulnerable to hacking: online wallets, mobile apps, exchanges, or various HW-devices. All of this has already been hacked more than once! Wait a minute, so where (should) store it, then?

Hope we don't get to see where the fast growing decentralized system still rely on centralized institutions for protection!

It is inevitable, as decentralization is gradually "morphing" into centralization through the use of intermediaries, namely, exchanges (as well as to the influence of the regulator). In some countries, it is already no longer possible to hold cryptocurrencies in one’s own personal wallet; instead, they must be kept in a wallet "approved" by (and subject to the control of) a regulator. What is this, if not a "loss" of decentralization?

[uchegod-21]

The centralised authorities have done well for freezing those funds at the right time which helped too in the efforts put towards recovering the stolen funds. But @op, think deeply about this, is the ability to freeze funds worth comparing the Bitcoin Decentralized network to centralization? It is even the major reason why bitcoiners should avoid centralized platforms.

With this kind of power the centralized authorities hold, they can freeze the funds of anyone they can, it must not neccessarily be stolen funds. That is their power, so they will exercise it. Nothing beats the kind of freedom you get from self-custody and taking responsibility for the safety of your bitcoins.

Moreover, most of this security issues we hear are not directly about Bitcoin network itself, but the various third parties that take custody of investors' funds.

[YOSHIE]

We all witnessed the development and story of how about $6.43 billion dollars was stolen from Binance. And one can't help but extract s :)ome useful lessons from the incident.

Returning to the point of the problem, Binance has made an official statement regarding funds being hacked from the Binance exchange.
As you said main point.
In short:

• The hackers did not succeed in making off with all the funds because most of the assets were successfully blocked and Binance guaranteed all user losses.

• Amount of Assets Hacked: On October 29, 2026, hackers drained approximately US$6.3 billion (or up to US$6.43 billion in some early estimates) of crypto assets from Binance.

• Freeze: Blockchain partners and stablecoin issuers (such as Tether and Circle) moved quickly to freeze approximately US$3 billion of the total stolen funds.

From the quote above I can understand the statement "What It Means For Bitcoin Players".
1. I believe that after the Binance exchange is repaired and the exchange returns to normal, it is very likely that selling pressure will remain, This hacking phenomenon is the biggest in crypto history, of course Bitcoin market panic is still occurring.
2. When a situation like this occurs of course Bitcoin players will sound the alarm to migrate their Bitcoin assets elsewhere, and many things are done by Bitcoin players themselves.

[Freeveto]

Now to Bitcoin, what we saw happen can't happen with Bitcoin. No one can simply contact a Bitcoin issuer to freeze an address because there's no central issuer. Now on the other side, this freedom however makes recovering Bitcoin in the case of theft very difficult.
This is not to talk down Bitcoin, but a gentle reminder that there has to be a separation between the technology of Bitcoin and the other custodian people use to get access.

Crypto definitely has to overcome the challenge of security, trust and accountability, not just the issue of adoption.

Hope we don't get to see where the fast growing decentralized system still rely on centralized institutions for protection!

Decentralized system is the best system, and that’s what Bitcoin comes with, but we decide to be using centralized system to be saving and controlling our Bitcoin, that is why we are suffering these hacks, but for people who use decentralized exchanges for their Bitcoin transactions and saved their Bitcoin in a wallet that is decentralized and an open-source, so that you can keep your seed phrase safe offline. Using centralized exchanges can be hacked, and your assets can be frozen till the exchange owners decide to open it to give access to use your money, and some exchanges can even go without given you your funds if the hack affected them that bad. Therefore, it is a lesson learned from these hacks to be keeping our Bitcoin safe in a wallet we can control.

[Zoomic]

Before USDT was born, there were already hacks happening on exchanges and thousands of Bitcoins were lost, and yet the market still survived. If Bitcoin was going to die it should have died during the early stage, so since Bitcoin has already reached this level where even institutional investors are adopting it, I don't think the recent hacks will change how they see Bitcoin. In fact, if you read the news, there are institutional investors still buying at this time, we have Strategy and Strive, both have billions of dollars in Bitcoin holdings.

Beyond the fact that Bitcoin has survived several exchange hacks, another lesson we should also learn from the different reactions people still place so much trust on intermediaries despite Bitcoin being created to reduce that dependence, we tend to see this each time a centralized platform fails.

Also, this Binance incident has also revealed the usefulness of freezing stolen stablecoins though it's a feature that Bitcoin wasn't primarily designed with. Bitcoin didn't come with such intervention mechanism and that's because one of it's strength is that no central authority gets yo decide which valid transactions should be allowed or not.

[BIT-BENDER]

To not complicate things the most useful thing one can extract from this binance hack is that you should not save your Bitcoin on an exchange because it's not yours alone.
I don't think anything is more important than this to an average Bitcoiner, yes there are other things to extract from this but I am seeing a lot of things and all of them are beginning to create an unnecessary panic and this isn't what the Bitcoin community needs.

[sunsilk]

This was possible because stablecoin users had it in them to intervene. An impressive move, but this same move explains that crypto can be contradicted.

Not stable coin users but the issuers - Circle for USDC and Tether for USDT.

Now to Bitcoin, what we saw happen can't happen with Bitcoin. No one can simply contact a Bitcoin issuer to freeze an address because there's no central issuer. Now on the other side, this freedom however makes recovering Bitcoin in the case of theft very difficult.
This is not to talk down Bitcoin, but a gentle reminder that there has to be a separation between the technology of Bitcoin and the other custodian people use to get access.

And that's why we become our own bank because there's no intervention from a central authority. That makes it decentralized and our own money is our responsibility.

Crypto definitely has to overcome the challenge of security, trust and accountability, not just the issue of adoption.

Hope we don't get to see where the fast growing decentralized system still rely on centralized institutions for protection!

People miss the human mistake why the binance hack has happened and the same goes with the hard ware wallet hacks.

It's not that automatically that the network has not been secured, it was secured all of the time but the loophole wasn't on the network but on how they have gained access to the wallets it.

[Faisal2202]

Hope we don't get to see where the fast growing decentralized system still rely on centralized institutions for protection!

Almost 51% has been frozen, not 44%.

BTW, they can't freeze ETH either. I don't mean to hurt your Bitcoiner optimism, just want to tell you that ETH is not completely decentralized, but still they won't freeze anything. Remember when they forced THORChain that why don't you stop funds from moving, and they said Why don't BTC or ETH do it instead, why us!

And BTC is decentralized, and there is no doubt about that. Your question about crypto can't be discussed or answered here? We can only answer about BTC, though. And speaking of stablecoins, they don't just depend on centralized authorities, they are themselves centralized authorities that have the power to click the freeze and unfreeze buttons.

[CucakRowo]

OP is quite right that there is absolutely no chance of this happening in case of Bitcoin.

This is because Bitcoin has no central authority and issuer who could simply block any address with single phone call or command.

IDK why people forget that technology and custodian are two completely different thing.

When people leave their funds on any exchange or any central platform, they are, in effect. And perhaps unwittingly surrendering to centralized banking system, albeit one disguised in the wrapping of crypto.

[RockBell]

i have seen a lot of questions about this, and another thing now is that when it comes to the safety of your assets, countless times they have convinced people to stop saving on an exchange they can get hacked, as they will always say not your keys, not your coin, " which should be properly understood. Self-custody is better than putting your trust in an exchange, and this is not just about Bitcoin operators alone this is a general case, and what happened to Binance should be a lesson already to many.

The best advice anyone holding should give is to use a more secure way to keep your Bitcoin, because a lot of people are still finding it very hard for them to decide how they want to keep their assets safe, and we should learn more about the safety of keeping it safe, and that way we can know what to do.