Binance Hack Siphons $100 Million | Kim Kardashian’s Costly Crypto Promotion

DEFI’S ACHILLES HEEL

Hackers stole an estimated $100-$110 million late Thursday night from Binance’s BNB Smart Chain (BSC), the latest in a string of attacks this year involving cross-chain bridges. Chain activity was suspended in the early hours of the heist but was restarted Friday morning. Shortly after the exploit, Binance CEO Changpeng Zhao announced that validators were turned off to completely stop the network while the company investigated the attack. Hackers attempted to drain $560 million by minting 2 million BNB tokens and depositing them into a BNB wallet.

The exploit was neither the first nor the largest, cross-chain hack this year: more than $2 billion has been stolen. Blockchain bridges allow users to transfer assets from one chain to another, locking the assets from one chain within the bridge while minting the equivalent on the other. This liquidity held within the bridges makes them likely targets for hacks, especially for decentralized protocols that have their data and code publicly available on websites like Github.      

THERE IS NO SUCH THING AS BAD PUBLICITY?

The U.S. Securities and Exchange Commission (SEC) fined Kim Kardashian $1 million for failing to disclose she was paid $250,000 to promote Ethereum Max (EMAX), which the agency classifies as an unregistered security. In January, Kardashian, professional boxer Floyd Mayweather and basketball star Paul Pierce were sued by investors in the cryptocurrency who alleged they were misled by separate posts the trio shared with millions of followers on social media. Kardashian will help with the investigation, according to the statement from the SEC, in exchange for being allowed to settle without admitting to or denying the charges.

Among the possible fallout of the investigation involving the ignominious crypto are questions about ramifications for the creators of the currency, the people paying for the servers that support the software, exchanges that allowed the asset to be traded and other defendants listed in the class action. Miraculously, the asset actually surged 40% in the hours following the announcement.

Source: Forbes Digital Assets, powered by Nomics.  Prices as of 4:00 p.m. on October 7, 2022.

CELSIUS EXECS CASHED OUT BEFORE BANKRUPTCY

Two executives of beleaguered cryptocurrency lender Celsius appear to have withdrawn millions of their own investments before the company suspended withdrawals and filed for bankruptcy, new court filings show. Former CEO Alex Mashinsky and related parties withdrew approximately $10 million worth of bitcoin, ether, USD coin and Celsius’ CEL token, according to the documents. Former Chief Strategy Officer Daniel Leon may have withdrawn between $2 and $7 million. Both have recently left the company.

The court filings, totaling more than 14,000 pages, also show the names and trading history of Celsius’ users—specifically, dates and transaction amounts. Though the judge said it’s a common practice in bankruptcy cases, Crypto Twitter went on fire over the so-called doxing of personal information. Crypto news and research publication The Block pointed out  that it might let anyone connect the named users with their previously anonymous cryptocurrency wallets and see their crypto holdings and other transaction information.

BANKS CAUTIOUS IN CRYPTO WILD WEST

A research report by Bain & Co. found that private investments into the so-called Web3 technology have surpassed $80 billion, with $48 billion going directly into financial-markets infrastructure. But a lack of regulation is slowing adoption from the industry’s biggest players, Richard Walker, a new partner at Bain and co-lead of digital strategies for financial services, told Forbes.

Big names in the financial sector have already, albeit cautiously, started to adopt Web3 applications beyond cryptocurrencies. J.P. Morgan, a Bain client, has been leading the way, issuing NFTs to attendees of its first crypto economy forum in December. Other banks, like Goldman Sachs and Japanese giant Sumitomo Mitsui, are interested in NFT technology but have not gone beyond announcing that they are exploring the tokenization of assets and implementation of NFTs. These different approaches boil down to the risk tolerance of different banks, says Walker.

BLOCKCHAIN 50: CALL FOR 2023 NOMINATIONS

For four years the Forbes Blockchain 50 list has chronicled the institutional adoption of technology popularized by bitcoin. Since the inaugural roundup in 2019 the enterprises on our list—often household names like Walmart and Boeing—have moved beyond test projects and now rely on distributed ledgers in key parts of their businesses to improve efficiency and transparency. Now is your chance to help us find the best possible honorees for next year’s issue. We look for businesses valued at $1 billion or more or those that generate at least $1 billion in annual revenue and have made meaningful use of the technology. Read more here.  

ELSEWHERE

Europe Bans All Crypto Wallet Services To Russia In New Sanctions Package [Decrypt]

Crypto Fugitive Do Kwon Is Set To Lose His South Korean Passport [Bloomberg]

FTX To Launch Visa Debit Card In 40 New Countries [The Block] 

Nina Bambysheva
Reporter
Forbes Money & Markets

Steven Ehrlich
Editor 
Forbes CryptoAsset & Blockchain Advisor

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