Recurring market commentary on what’s happening in the crypto markets, summarized by the Crypto Broker team at Crypto Finance AG.
Market commentary
Good Morning!
It was a rather uneventful week for the crypto markets until the BSC Token Hub was hacked on Thursday night. Bitcoin (BTC) is once again hovering around the 20k mark, where it has met resistance since early September. And Ethereum (ETH) is slowly starting to work its way back up after its price plummeted following the merge.
Binance Bridge Exploit
Once again, a bridge has been hacked. Shortly after midnight, Binance reported that its BSC Token Hub was compressed. The bridge connects the BNB Beacon Chain (BEP2) and BNB Chain (BEP20 or BSC). It is estimated that about 2 million BNB or $600 million were stolen. Binance estimates that between $100 million and $110 million was moved from BSC, with $7 million already frozen. Tether immediately froze the account. In addition, funds were moved to Polygon, Ethereum, and Fantom. The attack was reportedly possible due to a flaw in the way the Binance bridge verifies confirmations. This allowed attackers to forge arbitrary messages.
Five hours ago, an attacker stole 2 million BNB (~$566M USD) from the Binance Bridge. During that time, I've been working closely with multiple parties to triage and resolve this issue. Here's how it all went down. pic.twitter.com/E0885Dc3lW
— samczsun (@samczsun) October 6, 2022
The Binance chain decided to temporarily pause BSC to prevent the hacker from moving around $400 million worth of funds. Many may not know, but the Binance Smart Chain consists of 21 active validators, which makes it quite centralized and controllable. The BSC validators will bring back the BNB Smart Chain with a new version that will stop the hacker accounts from trading and disable cross-chain communication between the BNB Beacon Chain and the BNB Smart Chain.
The price of BNB did not crash as much as I expected. It only dropped 5% before quickly recovering 3%. In other new, the IOTA ecosystem Shimmer (SMR) token was successfully listed yesterday.
Happy Trading!
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