After the $6.3 billion Binance security incident, analysts say signature system limits may restrict losses

The $6.3 billion security incident at cryptocurrency exchange Binance involves the cumulative value of affected assets across 10 blockchains. CertiK analyst Jonathan Riss stated that public blockchain records show a hot wallet on Ethereum was repeatedly drained by attackers after new deposits arrived; on-chain records cannot reveal Binance's internal signing controls and transfer limits.

Jonathan Riss pointed out that if limits are enforced by the application initiating signing requests, those limits could be bypassed once that application is compromised; limits independently enforced by the signing system could potentially restrict transfers. Binance previously stated that attackers moved funds out of the normal withdrawal process through an internal wallet signing service.

Idan Ofrat, co-founder and chief product officer of crypto asset custody firm Fireblocks, said exchange hot wallets typically hold enough funds to cover several days of expected withdrawals, often accounting for a low single-digit percentage of assets under management. Alex Tobol, chief technology officer of Walt, said replenishing hot wallets from cold wallets should require separate treasury management decisions and manual approval. (Cointelegraph)