CZ warns of more AI-driven hacks after Binance's $6.4bn theft

Changpeng Zhao, the Binance founder who no longer runs the exchange, expects more AI-assisted attacks on exchanges and banks. “The industry needs to use AI to prevent AI hacks,” he told CoinDesk in an interview published on 3 November. “There’s no other way.” Zhao stepped down as chief executive in November 2023 after pleading guilty in the US to anti-money-laundering violations.

Zhao spoke five days after hackers took about $6.4 billion from Binance on 29 October, the largest crypto theft on record. The FBI attributed the attack to TraderTraitor, a hacking group from North Korea.

Attackers need one crack

Zhao argued that hackers get AI tools faster than banks and exchanges can deploy defences. “For attack, you only need to find one crack,” he said. The defending side has to cover every system at once.

He put banks “in a worse position” than crypto exchanges. In the short term, “we’re gonna see a lot more hacks,” he said, and only later will AI make security stronger.

Zhao gave no evidence that AI played a part in the Binance attack, and he did not mention North Korea in the interview.

Blockchain analysts have not found such evidence either. Elliptic co-founder Tom Robinson said the laundering of the stolen funds looks automated, “but nothing we have seen shows an AI agent making decisions.” We traced part of the laundering trail through Tron last week.

A common standard with no details

Zhao said the industry is discussing an alliance or shared security standards. Nobody has agreed on anything yet, and he named no participants.

He credited Tether, Circle, law enforcement and the US Secret Service with freezing stolen funds. The numbers from Binance since the hack:

• researchers estimate $2.85 billion frozen or seized, according to CoinDesk;
• Binance recorded $5.28 billion in net outflows over the 46 hours to Tuesday, chief executive Richard Teng said;
• Teng said hourly deposits now exceed withdrawals.

What it means for you

Zhao’s warning is a forecast, and he has not tied AI to this attack. The UK’s National Cyber Security Centre made a similar call today about AI malware, with a 2028 horizon.

If you keep funds on an exchange, their safety depends on that exchange’s security. The Binance theft showed it with no AI involved: Binance’s systems did not stop the attackers, and stablecoin issuers and police froze part of the money afterwards.

Zhao’s quotes come from CoinDesk’s interview. The outflow figures are Binance’s own, and no independent party has checked them.