Binance hack leads to BSC being stopped, BNB falling by 5% in 2 hours

Cross-chain bridges remain the most vulnerable spot in the cryptocurrency space, leading to regular hacks and coin thefts. This time, Binance Smart Chain's (BSC) bridge BSC Token Hub was the target.

Binance launched BSC in September 2020 to work with smart contracts. Since there are different variations of blockchains with their own unique features, rules and management standards, blockchain bridges are used to move assets between them. The variety of protocols results in complex architecture among bridges, which then creates potential holes for hackers to infiltrate.

BSC Token Hub was no exception. An attacker managed to mint 2 million BNB (the Binance ecosystem's internal coin), which is worth $586 million. In an attempt to stop funds from leaking, the crypto exchange stopped the BSC chain, including transactions with deposits, and BNB lost 5% of its value in two hours.

The freeze limited the hacker to withdraw only a fifth of minted BNBs, taking advantage of cross-bridges and DeFi platforms to do so. When investigating the leak, users estimated that about $100 million had been stolen. The BNB Smart Chain team later confirmed the amount lost in a Reddit post.

As of the time of writing, BSC was still offline (including from the older BNB blockchain), and the team promised to relaunch it within an hour tops. Binance is also assuring clients that all funds remain safe and sound.

In addition to the lack of security, the bridge hack demonstrated how centralized Binance chains are and how they can be brought to a halt in an instant.

Due to the complexity of their architecture, bridges are regularly attacked by hackers. On 1 August, the Nomad hack resulted in attackers getting away with about $200 million. In June, an attack on the Horizon bridge of the Harmony network was successfully carried out, resulting in a $100 million loss.

StormGain Analytics Team

(cryptocurrency trading, exchange and storage platform)