The hacker attack against Binance, in which digital assets worth approximately $6.3 billion were stolen, prompted warnings that cyber risk now affects not only crypto platforms but also traditional banks and investment firms. The attack was carried out on October 29, and the TraderTraitor group has been identified by US authorities and blockchain analysis companies as the likely perpetrator. Estimates indicate that around $3 billion of the stolen assets have been frozen.
Binance had sufficient financial reserves to limit immediate losses for its customers. However, this raises the question of what would happen in the event of a similar breach at a company with a weaker financial position and no ability to recover the stolen funds.
“No Financial Institution Is Immune”
“There is no reason for people to panic or assume that their money in traditional banks and investment platforms is suddenly at risk because of a successful attack against a crypto exchange,” says James Brumhall, a senior associate at Grosvenor Law who works in the field of financial crime.
He stresses that banks and regulated investment firms operate under requirements for operational resilience and the protection of customer assets. At the same time, Brumhall warns that “no financial institution is immune to a cyberattack.” In his view, the crucial question is whether the particular bank or investment company has sufficiently robust systems and control mechanisms in place.
Brian Dennehy, managing director of Dennehy Wealth, offers a broader criticism of crypto assets. In his words, they attract criminals, young investors and people tempted by the promise of getting rich quickly, but they have no reliable basis for valuation, while their prices are driven mainly by sentiment and speculation.
“This latest crisis is a timely reminder that cryptocurrencies are not stable, secure or a safe haven,” Dennehy says.Artificial Intelligence Is Accelerating Attacks
Richard Horne, head of the UK's National Cyber Security Centre, warns that the UK's resilience against hacker attacks “is not where it needs to be.” He expects hostile states such as China and Russia to use artificial intelligence to attack critical infrastructure, which also includes financial services.
Nigel Green, chief executive of de Vere Group, believes that wealth protection is entering a new phase. “Artificial intelligence enables attackers to plan and carry out strikes at machine speed, so the protection of money must move just as quickly,” he says.
The issue is already in the focus of financial regulators and central banks. Bank of England Governor Andrew Bailey warns: “If we do not have confidence in money, we cannot function as a society.” Kristalina Georgieva, Managing Director of the International Monetary Fund, in turn points out that an inadequate response to cyber fraud could prompt people to keep their savings in cash.
Record ATM withdrawals have already been recorded in the United Kingdom. Some of them are linked to fears following the attack against Binance, while another reason is the “Be Ready” campaign, which encourages households to prepare for war, a natural disaster or a major cyberattack.