00:00Last week, hackers stole around US$6.3 billion worth of cryptocurrency from Binance, one of the world's largest crypto
00:08exchange.
00:09How did they get in? Our international's Miranda Liu joins me now.
00:13Miranda, how does something like this happen to a platform as big as Binance?
00:18Shouldn't it have an impenetrable security system?
00:22Yeah, it does, Hafiz. And that's actually one of the interesting things about this incident.
00:27In its latest findings, Binance describes a multi-stage attack involving social engineering and malicious software downloads.
00:38In simple terms, social engineering refers to when hackers manipulate or try to trick someone in order to give access
00:46to a system.
00:46So rather than having to break through the platforms, cybersecurity analysts we've talked to said that the attackers may have
00:56targeted people who already have privileged access to the system.
01:04Again, we are very early on in the stages of the investigation. I'm sure that a lot more is going
01:10to come out.
01:11But what we've seen is that this is not, you know, money that was left on a table and that,
01:18you know, a pass or die swept by.
01:19The attack involved probably some form of social engineering because the attacker essentially got access to highly privileged accounts within
01:31the Binance organization.
01:32So that could be as simple as compromising the laptop of one of the people who developed codes for that
01:39platform, one of the code developers for the Binance platform.
01:43So it could be somebody who is in a very high position to authorize transfers.
01:51So, Mirena, getting access is one thing. How are they able to transfer billions of dollars without getting stopped?
01:58So think of a cryptocurrency as a wallet as a digital safe, right?
02:04So to move the assets inside, transactions must first be authorized.
02:09That's where the wallet signing service comes in.
02:12In this case, the attackers gain unauthorized access to the system's wallet and are able to authorize transactions that enable
02:20funds to be moved.
02:21So this wasn't simply just the attackers getting into an ordinary customer's account.
02:29The attackers managed to get access to a system that had the authority to move the assets held by Binance.
02:35According to Professor Christine, the attackers exploited a relatively new feature in Binance, which allows the wallet to give another
02:46party permission to carry out certain actions on its behalf.
02:50Think of it as like giving the attacker some sort of limited power of attorney, allowing them to carry out
02:56specific actions.
02:57So let's hear it from the professor.
03:02If I can use a real-world analogy, they essentially abused a power of attorney type of feature, where essentially
03:11you can delegate ownership of the resources to somebody else.
03:15And what the attacker did was to essentially be able to acquire power of attorney and immediately use that to
03:24empty the wallets that they were targeting.
03:27That type of feature is something that was just deployed in Ethereum.
03:33This is new.
03:34And this was not well tested.
03:36And I think that people will really take a very strong second look at it because it was obviously abused
03:42here.
03:45Another thing that also pops up is, of course, the issue of trust.
03:50What happens to the customers?
03:51What does this do to confidence in the cryptocurrency system?
03:57So Binance has assured customers that they will not bear the financial losses due to the breach, with the company
04:04saying it will absorb the impact.
04:06But the bigger question is whether customers can continue to trust the platform, especially after the breach involving its own
04:14internal security systems.
04:16So according to the analyst, it's still too early to assess the longer term impact on customer confidence.
04:24Much will depend on how Binance will deal with the aftermath, including whether it can demonstrate that customers' assets can
04:32be protected and address the security weaknesses.
04:36And I guess be transparent with what went wrong.
04:41Ultimately, the incident highlights what security is.
04:44It's not just about keeping attackers out, but also ensuring that access within a platform cannot be abused by outsiders.
04:52Yes, we're going to keep a close eye on cybersecurity issues.
04:55Thanks, Miranda, for sharing that.
04:57That was Miranda Liu, our international correspondent on the Binance hack.
