Binance Freezes Withdrawals in 2025 After $5M Ankr Crypto Exploit
Discover how Binance, the world's largest crypto exchange, halted withdrawals after a $5 million exploit on the Ankr project, causing a 99.5% price plunge and impacting users.
Tobi is a crypto writer at Investopedia dedicated to breaking down blockchain and cryptocurrency concepts for everyone.
In 2024, Binance, the leading crypto exchange by trading volume, temporarily suspended withdrawals due to a security breach involving the crypto node project Ankr.
Essential Highlights
- Binance halted withdrawals after a critical exploit targeted the Ankr platform.
- The attacker minted an unlimited supply of aBNBc tokens, swapping 20 trillion for BNB before transferring funds via the Tornado Cash mixer.
- Ankr’s token price crashed 99.5%, dropping to $1.51, as reported by Coingecko.
Binance CEO Changpeng Zhao Confirms Security Breach
Binance CEO Changpeng Zhao (CZ) acknowledged the hack, stating, "Our initial investigation shows the developer’s private key was compromised, allowing hackers to deploy a malicious smart contract." He added, "Withdrawals were paused hours ago, and approximately $3 million moved to our centralized exchange (CEX) has been frozen."
Ankr is a decentralized finance (DeFi) staking and web3 platform that simplifies blockchain staking and development. The Ankr team confirmed the attackers stole roughly $5 million in BNB, Binance’s native token.
How Hackers Exploited Infinite Token Minting
The breach occurred when hackers exploited the smart contract governing aBNBc tokens—the staked version of Binance's BNB token that accrues rewards on Ankr—by minting unlimited tokens.
Following this, the attacker exchanged 20 trillion aBNBc tokens for BNB and funneled the funds through Tornado Cash, a crypto mixer that obfuscates transaction trails. They then converted the BNB into 5 million USDC and began transferring assets from Binance Chain to Ethereum. This incident caused Ankr’s token value to plummet by nearly 99.5% to $1.51.
Recovery and User Compensation
Ankr announced plans to compensate affected users, stating, "We will capture a snapshot and reissue ankrBNB tokens to all valid aBNBc holders prior to the exploit. The ankrBNB token will remain redeemable, while aBNBc and aBNBb tokens will be permanently disabled."
Although Binance’s direct loss was contained, this marks the exchange’s second hack within two months. The crypto industry faced heightened vulnerability throughout 2022, including Binance’s previous $570 million loss in October.
Discover engaging topics and analytical content in Cryptocurrency News as of 07-12-2022. The article titled " Binance Freezes Withdrawals in 2025 After $5M Ankr Crypto Exploit " provides new insights and practical guidance in the Cryptocurrency News field. Each topic is meticulously analyzed to deliver actionable information to readers.
The topic " Binance Freezes Withdrawals in 2025 After $5M Ankr Crypto Exploit " helps you make smarter decisions within the Cryptocurrency News category. All topics on our website are unique and offer valuable content for our audience.