Market deep dive: It was an uneventful week in Crypto, until the BSC Token Hub was exploited on Thursday night

 

It has been a rather uneventful week in crypto. BTC is once again hovering around the 20k mark, where it has seen resistance since the beginning of September. And ETH is slowly starting to make its way back up, after dumping post merge.


A bridge has yet again been hacked. Shortly after midnight, Binance reported that its BSC Token Hub, the bridge between BNB Beacon Chain (BEP2) and BNB Chain (BEP20 or BSC), had been exploited. It is estimated that around 2 million BNB or $600m were stolen. Binance estimates that between $100m and $110m have been moved off BSC, with $7m already frozen. Tether blacklisted the account. And funds were moved to Polygon, Ethereum, and Fantom.


The exploit was allegedly possible due to a bug in the way that the Binance Bridge verified proofs, which allowed attackers to forge arbitrary messages. Find a detailed twitter thread here.


Binance chain decided to temporarily pause BSC to stop the hacker from moving around $400m worth of funds. Many might not know, but the Binance Smart Chain consists of 21 active validators, making it rather centralised and controllable. BSC validators will bring back the BNB Smart Chain with a new release, which stops hacker accounts from acting, and disables the cross-chain communication between the BNB Beacon Chain and the BNB Smart Chain.


The price of BNB did not crash as hard as I expected, only dropping 5% before rebounding 3% quickly.


In other news, the IOTA ecosystem Shimmer (SMR) token was successfully listed yesterday.


Last but not least, we released our first House View for September on Thursday. Find it here.


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