Binance hack: Investigators in a 'cat and mouse game' to recover $6.3 billion in stolen funds
More than $6 billion in crypto was stolen from Binance, setting off a race to recover the funds before North Korea-linked hackers can launder them into cash.
Key points
- Crypto firms and law enforcement are racing to recover over $6 billion stolen from Binance.
- Binance estimates about $3 billion in cryptocurrency has been frozen so far.
- Investigators say hackers are using new laundering methods and professional networks to convert funds.
Crypto firms and law enforcement are racing to recover more than $6 billion worth of cryptocurrency stolen from Binance before hackers can hide the funds, CNBC reported. Experts described the effort as a "cat and mouse game" against alleged North Korean hackers who use crypto obfuscation techniques and global money laundering networks to convert digital coins into fiat currency.
Binance pledged to cover losses using its Secure Asset Fund for Users. TRM Labs and Chainalysis have both attributed the hack to a North Korean state-backed group called TraderTraitor.
Stablecoin issuers freeze funds
After the hack, stablecoin issuers including Circle, which issues USDC, and Tether, which issues USDT, moved to freeze funds. Binance estimates around $3 billion worth of cryptocurrency has been frozen so far.
Issuers could burn and reissue the tokens to potentially recover losses, destroying the frozen stablecoins and reissuing new ones held by a legal government entity and returned to Binance. According to TRM Labs, the hackers moved quickly to sell USDT to market makers and borrow ether against the stablecoin, since ether is harder to freeze.
It's this continued cat and mouse game where bad actors are trying to obfuscate their transactions and we are trying to track and trace them
— Ari Redbord
How hackers evade tracking
Blockchains are public ledgers, so forensic firms can track crypto across wallets. Chainalysis CEO Jonathan Levin told CNBC there are no signs of crypto mixers being used yet; instead the company observed "laundering patterns we have not seen before," with hackers automating transfers between wallets.
Levin said the hackers moved a lot of money to different Tron addresses, and his teams are working around the clock to follow it. Hackers are increasingly using Chinese money laundering organizations to turn crypto into fiat, according to Levin and TRM Labs' Ari Redbord.
