A major theft of $6.3 billion from Binance has reignited concerns over whether cryptocurrency exchanges are more vulnerable to attacks compared to traditional banks. The scale of the incident
A major theft of $6.3 billion from Binance has reignited concerns over whether cryptocurrency exchanges are more vulnerable to attacks compared to traditional banks. The scale of the incident has increased scrutiny regarding sector-wide security procedures, withdrawal controls, and financial resilience.
Preliminary assessments indicate that the breach did not involve breaking Ethereum’s core cryptography, but rather took advantage of wallet permission gaps and operational control failures. Hackers reportedly withdrew about $2.5 billion from a Binance-owned wallet in less than four minutes. During the attack, Ethereum’s EIP 7702 feature was reportedly abused, with harmful code authorized and executed on the compromised wallet.
Mini dictionary: EIP 7702 is a technical feature enabling Ethereum wallets to perform smart contract-like functions under specific conditions. While this brings flexibility, improper authorization or malicious code approval can introduce additional risks.
Richard Teng, co-CEO of Binance, stated that an internal investigation identified multiple security breaches. Teng shared evidence indicating the attackers used mechanisms designed to erase operational traces. Binance has reportedly rebuilt its withdrawal infrastructure and overhauled signature processes, employee devices, and key management systems.
Richard Teng confirmed the discovery of several security breaches, the reconstruction of Binance’s withdrawal infrastructure, and a reassessment of its signature processes and key management during the inquiry.
Tomer Sharoni, CEO of the Israeli blockchain intelligence firm Addressable, argued that the crucial difference lies not in how attackers gain access, but in what they can control once inside the system. According to Sharoni, a hacker could infiltrate the computer of an employee at either a bank or a crypto exchange using similar techniques, but in the crypto sphere a successful breach can lead to faster and larger losses due to the nature of digital assets.
Abdul Rafay Gadit stated that crypto platforms are not targeted more frequently than banks, but rather the visibility of incidents on the blockchain makes them more transparent, with events becoming public in a matter of minutes.
ZIG Finance co-founder Abdul Rafay Gadit provided a different perspective. Gadit noted that banks are also frequently affected by breaches, but many such cases are not immediately disclosed to the public. He emphasized that crypto thefts appear more frequent because blockchain transactions can be tracked openly and instantly, creating a perception of heightened risk.
A 2024 report by the International Monetary Fund (IMF) found that banks remain the most common targets for cyberattacks within the financial sector. The report indicated that financial institutions account for around 20% of all reported cyber incidents across industries, with direct losses from 2004 to 2023 nearing $12 billion. However, these figures alone do not clarify whether banks or crypto exchanges are targeted more often.
Institution Type Reported Cyber Incidents (%) Direct Losses (2004–2023) Banks ~20% ~$12 billion Crypto Exchanges Not specified Included within above sector totalOne core risk for crypto exchanges stems from the fact that most confirmed blockchain transactions cannot be reversed. In contrast, banks can sometimes rely on compliance checks, intermediary oversight, or transfer recalls, which help mitigate the impact of breaches. At crypto exchanges, once funds are transferred out, the consequences are often immediate and severe. Although some token issuers can freeze stolen assets to help contain losses, this approach does not guarantee recovery in every scenario.
Sharoni noted that the speed, certainty, and irreversibility of blockchain transactions make large crypto reserves especially attractive to cybercriminals. Gadit suggested the adoption of operational countermeasures from traditional banking—such as separate signing authorities, multi-step approval protocols, and withdrawal limits—could be essential in strengthening crypto exchange defenses.
The Binance incident has amplified broader concerns about systemic risks in the crypto industry. Blockchain security company CertiK reported that sector-wide losses reached $1.28 billion in the third quarter of 2026, reflecting a 56% jump compared to the previous quarter. A $1.5 billion theft at Bybit in February 2025 also demonstrated how digital asset management systems are frequently targeted.
Daniel Tunkel, who leads the financial regulation practice at London-based law firm Edwin Coe, described crypto exchanges as being exposed to major accident risks. Tunkel stressed that regulators should not merely focus on preventing attacks but also ensure exchanges have the financial reserves and operational safeguards necessary to cope with large-scale breaches.
Although blockchain transparency helps trace stolen funds, it does not guarantee their recovery. Industry observers emphasize the challenge is closing the gap between detecting a theft and preventing it from taking place.
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