The CEO of cryptocurrency exchange Binance says his company is getting closer to identifying the hacker behind a $570 million hack on its BNB blockchain. After getting some tips from law enforcement on who the hacker might be, Binance is now “narrowing down” the person or persons behind the attack, Zhao said in an interview on CNBC’s “Squawk Box Europe.” During the attack, a so-called cross-chain bridge was targeted, allowing an unknown hacker to withdraw 2 million Binance’s BNB tokens worth approximately $570 million. The data from Chainalysis indicates that more than $1 billion has been lost due to breaches on cross-chain bridges so far this year. Cross-chain bridges facilitate the swift transfer of tokens from one blockchain platform to another.
Decentralized finance, or “DeFi,” is one of the fastest-growing sectors of the financial industry. However, bridges have become criminals’ targets due to flaws in their underlying algorithms. “We’re still actually chasing … helping [authorities] to chase the bad players, working with law enforcement around the globe,” Zhao said. “Working with law enforcement is one of the ways that we can try to make the space safe.” “Actually, in this particular instant, law enforcement gave us some tips of who they think it might be. So we’re actually narrowing down.” As a result of the attack, Binance paused activity on its BNB Chain blockchain network after coordinating with network validators – individuals and entities that sign off on transactions – to implement a software upgrade. Zhao, who goes by “CZ” online, explained that BNB Chain prevented most of the targeted funds from being stolen. “The blockchain was able to freeze about 80% to 90% of it, so the actual loss of it was much smaller,” he said. The “vast majority of the funds remain under control,” Binance’s BNB Chain said in a statement at the time of the hack. About $100 million was unrecoverable, BNB Chain added. Originally called Binance Chain, Binance developed the BNB Chain in 2019. It features a native token, BNB, that can be traded or used in games and other applications similar to blockchains.