> And decreasing, since BTC is dropping as we speak. Always a good idea to hedge a currency with the currency itsself
Depends on what you’re insuring, no? For theft, it actually makes senses, right? That way, you’re insuring a constant number of coins, no matter what the market is doing. If you’re insurance currency would tank during a bitcoin heist, you would lose the insurance effect.
This might sound good.. but freezing currencies is bad. It evaporates trust of liquidity from whoever is doing governance. It's part of the reason why the bond market is doing what its doing lately and why countries are on-shoring gold reserves.
Bitcoin is volatile enough you can cherry-pick pretty much any %age you want based on the dates you choose. Which you seem to have done here - "happening" to choose the day with the lowest single day value in the last 3 years for your comparison point.
For another narrative, it was 83,038 a month ago on Sept 29th, so is down 5% in one month. And one year ago it was 112,562 on Oct 29th 2025 - down over 30% in one year. Well into "bear market" territory.
Using "traditional" market indicators and definitions for things like bear/bull markets doesn't feel sensible for such a volatile market.
Fine, but the comment "It's a (weak) bear market capitulation signal" is inapplicable, either because defining bear/bull markets doesn't feel sensible, or because it's not currently in the capitulation stage of a bear market, but some way off the bottom.
Though in that case the crash was directly due to "effectively altruist" SBF fraudulently dumping customer assets in a half-brained and presumably stimulant-addled attempt to manipulate the market and reduce his liabilities.
Not making any market predictions here-- just saying that it's probably not that useful to generalize from that event.
Not to be too pedantic, but with some napkin math, I don't think this is true. Looking for clarification!!
I downloaded Binance's self published market data (https://data.binance.vision/), calculated spot and futures volume for the past year, and then applied their *highest fee tier* on both sides of the volume (for every $1 traded, they generate a fee on the taker and the maker. the fee rate is asymmetrical).
Spot revenue worked out to $7.6B USD, perps revenue worked out to $13.8B
This is an upper bound on the fees charged on volume. Binance also scams their users with a b-book, has DMM deals, etc.
I don't want to get into all that today.
But the final result is that they print somewhere in the range of $20B per year on fees. I guess CZ also has huge stockpiles of BTC and stuff. A 1% rise in BTC price probably means more for them than their actual fees, LOL.
All this to say, I think $5.6B significantly hurts.
See Google's stock price today. Their ads business slowed down a bit, and their stock tanked 10%. If binance was publicly traded, I imagine a similar affect would be demonstrated on their price.
If your crypto was stolen in this, atleast you can rest assured that your money will be put to good use. In North Korea that is, by the military. I'm sure at this point Kim himself has Bitcoin merchandise with how often they make massive heists
If your crypto was stolen in this, it wasn't your crypto. It is simply cryptocurrency that has been reallocated from an exchange to a more competent party, as the free market intended.
I don't think the security trade-off for most people is clear here.
Given things like the ledger hardware attack[1] I think the time indexed risk of using a centralized exchange is probably lower than doing self-custody.
I understand that many people do self-custody for philosophical reasons, but I think trying to disguise this as a security decision ("If your crypto was stolen in this, it wasn't your crypto.") is arguable at best.
By the nature of blockchain, it's never, ever your crypto. It's allocated to whichever bucket the majority of participants in a given network agree to allocate it to.
Well, not exactly. A malicious majority of miners could rewind the chain as they please. They could indirectly steal some funds by undoing certain transfers, but they couldn’t just directly reassign funds to themselves.
Back around 2012 I created a paper wallet using an offline website (it was HTML and JS downloaded locally that worked without internet. I put it on a USB stick and then use it in a laptop without internet), printed it out and put it in a safe
I did a similar stunt with an old PowerBook where I electrically disabled the WiFi/Bluetooth so it wouldn’t be online unless I plugged in Ethernet, generated keys, and played around with mining. This was back in 2010 when this was all just basically toys for fun. I also encrypted it all with FileVault.
Then I forgot my pass phrase and have never been able to recover any of it. I don’t even know how many btc were mined/lost.
Before anyone asks, no, there aren’t any usable exploits / vulns found for the encryption methods used. And from what I can tell the coins in question have still sat frozen for going in a decade and a half now. I suspect many other hackers did the same thing…
Okay maybe in 2010 you could use a CPU but even by 2012 it was entirely dominated by GPUs and I think even dedicated hardware was coming out around that time or soon after
> Coldcard’s software is built on MicroPython, and Coinkite supplies its own hardware-RNG wrapper for the device’s STM32 chip. To avoid conflicts, Coinkite deliberately disabled MicroPython’s built-in RNG path by setting a configuration flag, MICROPY_HW_ENABLE_RNG, to zero. The problem: the underlying library checked only whether that flag was defined, not whether it was enabled (set to a non-zero value). Because a flag set to zero is still “defined,” the build silently compiled against the wrong code, and seed generation fell back to a deterministic software pseudo-random number generator called Yasmarang
bitaddresses .org? If the JS code was defective, the coins can still be stolen later if the hacker can recreate the keys by going through the small key space, despite the coins being created being offline.
idk the whole point of hardware wallets is that they are supposed to be a simpler stack. But if you're using a closed source hardware wallet...
An old laptop with the wifi card taken out is more transparent and auditable. It just runs the ordinary open source code
But I just keep all my funds in a hot wallet, no multisig. And if I get hacked I lose it all. I think the answer is just have good security and dont get hacked. The risk of losing cryptocurrency will encourage security advances across the whole ecosystem. I think I will set up multisig eventually
I wonder if wallet is not a good or bad analogy considering it would make sense to have many wallets to distribute potential damage instead of being taken out in a single hit... UX issue?
Or if it is your key and your air-gapped hardware wallet gets hacked because someone didn't use the right RNG. Crypto is apparently never yours; you're just holding on to it for some future criminal or nation state.
hardware waller is NOT your key too. YOUR key is the paper wallet generated OFFLINE on a clean laptop that was never connected to web. There is a giant difference.
Back in 2016 a then-huge Ethereum smart contract called "The DAO" [1] had a loophole that let an attacker extract a third of all the funds.
But a lot of the developers and miners had either lost money themselves, or had friends who'd lost money, or felt the embarrassing incident was devaluing their own Ethereum holdings. So they decided to allow takesies-backsies.
There's probably a philosophical lesson there about power and who the rules really apply to.
I vividly remember a number of discussions/debates during that time (including on HN). I was more favorable to cryptocurrency in those days, and one of the things that contributed to my disillusionment was watching the people deepest and closest to it rediscover financial regulation from first principles, now that it was in their interest.
Witnessing the same people discover philosophy from first principles in the face of AI has been similarly farcical, as if we’re the first people to try and wrestle with a definition of intelligence.
I don’t think I understand what you’re trying to say.
In the literal sense, people have been forcing their philosophy on other people for at least as long as we’ve had societies, so I assume it’s not that.
Arent you disagreeing with yourself? You say these people are just now wrestling with the question of what intelligence is despite it being a longstanding philosophical question. So it clearly wasn’t forced on them.
I myself was held prisoner by John Searle for 20 years, my only contact with the outside world by notes slipped under the door written in Chinese - a language I do not speak.
By that logic financial regulation is philosophy too but that makes the original comparison of financial regulation to philosophy non sensical. You’re shifting the terminology beneath out feet.
Law is downstream of philosophy. Youre forced to deal with conclusions that may be based in philosophy (or they may be arbitrary or self interested). Nobody makes you hold a position on mens rea. In that way you can ignore the philosophy.
I don't think this counts as takesies backsies. This incident clearly followed the code is law principle, the whole point is that a majority forms the chain of truth. In this case, a majority decided to splinter and use a different chain where the incident never occurred.
As far as I understand blockchain, that is the system working as intended. Some nodes choose to run Ethereum Classic and some choose to run Ethereum. Isn't that the whole point? Decentralisation?
The DAO incident was a special case. It was only sane to do the rollback because the stolen funds were time-locked up for 28 days.
Ethereum never did it again, rolling back hacks didn’t (and couldn’t) become normal policy. IMO, they shouldn’t have made an exception, as it set a bad example.
I’ve seen a few other small projects attempt to do rollbacks since, but it usually turns into some kind of mess. In most hacks, the coins aren’t time-locked and quickly get laundered through smaller exchanges (and other services) which act as mixers. The stolen coins end up in the hands of a bunch of innocent people, and the rollback then causes way more harm as those users lose their coins.
...while, generally, being thoroughly fleeced by whichever set of wolves (who do understand monetary systems very well indeed) gets wind of the situation and manages to snag the best seats at the feeding trough filled with naive money.
Talk to chatgpt about how a checking account works, and really understand what happens when you put some money in the bank, and when you transfer that money to another person at another bank, how it's accounted for, how the banks actually do that transfer.
Reply to the edit: the parent comment was making a joke (though maybe there is some depth to it) and your reply sounds like a rhetorical question by a spoilsport. Unfortunate!
ETA: it's a joke because the original saying is "those who don't know history are doomed to repeat it"
Going to school and reading up on how and why we got where we are...?
Some people (particularly criminals and oligarchs) might not like them, but most of the structures around financial movements exist for very practical reasons, often stemming from the will to uphold the rule of law. Obviously nothing is perfect (the US have an excessive level of control, VISA/Mastercard are de-facto monopolies, etc etc), but one cannot seriously think that the way to fix things is to reimplement everything from scratch in a wild west of shady unaccountable operators...
<< one cannot seriously think that the way to fix things is to reimplement everything from scratch in a wild west of shady unaccountable operators
One absolutely can, but I think things have to first get sufficiently difficult for ordinary folks to even notice. Fortunately ( sarcasm tag here for otherwise perfectly normal individuals, who may be missing some caffeine in their organism ), given that the war is coming along with various related national security restrictions, we may soon be able to experience that particular slice of fun.
My intuition is saying: the system arose naturally and intelligently over a long period of time, and even with its flaws has a lot of "load bearing legacy code" that few people understand, and new "engineers" think they'll just rewrite the whole thing from scratch and delete the "junk DNA" to use another metaphor. A little time passes and the beautiful clean rewrite collapses because of "totally unforeseeable circumstances" and the "old broken legacy system" is used to save the day. Somewhere a senior "monetary engineer" rolls over in his grave...
Any recommendations for books? Or even podcasts?
I don't have zero understanding. It sounds like you have a deeper understanding than I do.
The entire financial system is a chaotic boundary between thieves and opportunists, and people who want to keep thievery and opportunism under enough control to keep the system nominally workable.
It's always been like this. Which is why financial systems blow up and/or collapse regularly.
The value in USDT and USDC comes from the fact that they can (theoretically) be redeemed for real US dollars. One thing the issuers can do is announce "we will never accept redemption requests for these particular stolen coins", making them more or less worthless.
Oh so you're saying a central authority can declare your currency worthless at any time? Good to know. Sounds very like a central bank issued currency though?
It's literally in USDT contract [1], see line 264. USDT is implemented as a contract in several other networks like ETH and has a blacklist. So every USDT operation is a record in ETH blockchain that calls one of the methods (like "transfer" or "add to blacklist").
Well I don't think they're very decentralised, which was the original premise.
Any rules can and have been changed by those with leverage to do so (be that exchanges, miners or devs), in the end any system like this storing value is captured and controlled.
They are decentralized cause they operate on a sort of consensus between nodes as was original premise. Are they "very decentralized" depends on your definition of "very", of course, and techical realities of a particular situation.
Doesn't apply for USDT and USDC which can freeze funds with a court order.
And like the DAO hack on Ethereum showed, if most people who run blockchain software decide that something never happened, they can revert transactions that way.
>And like the DAO hack on Ethereum showed, if most people who run blockchain software decide that something never happened, they can revert transactions that way.
Isn't that a pretty integral part of the blockchain? 51% attacks were even featured on the HBO show Silicon Valley.
Well, Tether was started by an Epstein friend and first handled by the CIA Deltec bank in the Caribbean. Now it is handled by Lutnick's Cantor & Fitzgerald and is in Bukele's El Salvador.
Don't mess with Tether, it is practically state owned.
Interesting, so it ties into the NSA vs CIA war? Some nerds from NSA/MIwhatever launched crypto, then the CIA trust fund nepo kids hijacked/weaponized it through tether
There's an amazingly hilarious interview with the Deltec's "Deputy CEO" and CNBC back in the day:
- was conducted from his gaming rig
- about Deltec's (and therefore Tether's) money movements being several times larger than all the banking in their country was due to people misunderstanding the country's two banking licenses, the names of which HE "couldn't remember right now" (the Deputy CEO of a bank who can't remember the name of the banking licenses where they operate?!?), and he "wasn't sure which [banking license] the bank has, but we might (emphasis mine) have both"
- oh yeah, said Deputy CEO's "resume": 33 years old, by his LinkedIn claimed to have graduated HEC Lausanne in Switzerland with a Master of Science at the age of 15... celebrating his graduation by immediately being named Professor of Finance at a university in Lebanon. While dividing his spare time between running hedge funds in Switzerland (called Indepedance [sic] Weath [sic] Management) and uhh... Jacksonville, FL.
Once CNBC's viewers started ridiculing and questioning both Deltec Bank and Tether and when that looked hilariously bad, they removed his info from the bank's website.
And when that looked bad, they added it back.
And when that looked bad, they removed the bank's whole website, and replaced it with a broken WP template with no working links.
Hey, look, several years after that, go to Deltec's website. "Ultra sophisticated private banking" running on a different WordPress site. "Client login"? "This site can’t be reached Check if there is a typo in ebanking.deltecbank.com. DNS_PROBE_FINISHED_NXDOMAIN". Just as has been the case for years.
... and then the entire bank website was replaced with a low-effort WordPress template. Their online banking was Javascript hard coded to refuse all login attempts.
"Sounds legit to me", said the crypto bros. "Fuck the regulatory system. This is the new era."
Most crypto is "majority rules" where the majority is either "majority of the currency" (proof of stake) or "majority of the mining power" (proof of work).
In this case, iFinex has the explicit ability to freeze funds in Tether.
Probably not everyone knows, but USDT has a "black list", and admins can prevent any address holding USDT from spending. The black list is implemented in USDT contract.
So USDT is not truly decentralized and your money can be frozen for any reason or no reason at all.
Where coins are held is completely irrelevant. There are cryptocurrencies on real blockchains, and while the technology is dumb and mostly useless, nobody denies that PoW and properly implemented PoS are decentralized.
And then there are centrally issued and controlled coins on private, permissioned ledgers a.k.a. databases. But most cryptobros never cared about the technology nor the political goal, so anything can be called a cryptocurrency as long as it's a medium for gambling and speculation outside the regulated financial framework.
I keep saying this: don't bother trying to dunk on crypto people with accusations like this. To a first approximation, nobody in crypto actually believes in the stated principles of anti-centralization, freedom, etc. It's entirely about number go up and always has been. Your charge of hypocrisy just bounces straight off people who never cared about the politics.
In the beginning of crypto people believed in it. But as the numbers went up and up and up it attracted the wrong people. And the original people left.
Now the traditional banking system is basically rebuilt in crypto. The banks are busy the exchanges. The EU even talk about making it illegal to store money in your own wallet.
right but too late to call freeze on the original wallet address as per gp's post. I would imagine it got distributed to many wallets and attempts to tumble by the time Tether could move on it.
USDT is implemented as a contract written in Solidity, working over other network like ETH, and it has a blacklist managed by admins. Once address is added to a blacklist, you cannot spend anything from it.
The purchasing power of one US dollar is 64% of what it was in 2008 when BTC was invented, and is on track to be worth half of what it was in 2008 by 2032, the same year that the social security trust fund is on track to go insolvent and see benefits automatically cut by 22%, which surely will not be papered over with more money printing :)
I understand the rationale around targeting inflation and seeking to actively avoid deflation. That being said, I wish the inflation target was less than 1%.
Eventually, possibly within my lifetime, a Big Mac meal is going to cost $50.
> Eventually, possibly within my lifetime, a Big Mac meal is going to cost $50.
Is the problem the number or the concept?
Your salary should also go up so the only thing affected is the cash you hold. Would it be better if the currency would be version-bumped every 10 years and rescaled to remove the inflation?
> You don’t want your actual currency to gain value just by waiting.
Relative to what? Talk of BTC gaining value is primarily wrt USD; I'd be perfectly happy with my actual currency (GBP) gaining value wrt USD.
I suppose BTC can only 'deflate' in the long-run (and with an assumed supply of goods and services available in exchange for it) since the mintable volume is fixed. But perhaps it exposes that talking of currencies inflating is a bit sloppy, as it doesn't really make sense for BTC, and it's the economy or banking system that inflates really..
That's why it's not safe to hold fiat money, it's by design. Governments don't want people to hold it, they want them to cycle it, spending it, investing it, and lending it out.
The existence of harder forms of money (gold, bitcoin, etc) is an expected consequence of how the system is designed, and not in any way a subversion of it. Somehow, both sides seem to miss this point.
> The existence of harder forms of money (gold, bitcoin, etc) is an expected consequence of how the system is designed, and not in any way a subversion of it. Somehow, both sides seem to miss this point.
Can you expand here? Governments don't want to incentivize storing value in order to encourage spending, but people want to be able to store value because that's what we've been doing since farming.
Is it because money is a medium of exchange and not a store of value?
It kinda is too bad because every inflation miss compounds, permanently. The 6 and 7% annual rates the US experienced a few years back are permanently embedded in price levels - it's not like the Fed adjusted its target down for a few years to counteract past years of high inflation, nor is it even evident that current policies are working, given that inflation hasnt actually been at 2% since 2018 (excluding 2020) and inflation is rising again in 2026. Obviously the late 70's were worse, statistically, but the Fed took enormous steps while the current Fed seems far more hesitant to ignore the government and Wall St.
>> You don’t want your actual currency to gain value just by waiting
> You might not, I do.
Then you don't want a currency. For something to be money it needs to (among other things) be a medium of exchange, and nobody really wants to trade away a thing today if they know it will be more valuable tomorrow.
Yeah, I want the assets I hold to increase in value, too, or at least not decrease.
Suppose you have some control over currency. You run a country. I'm that case, so you still want the currency to gain value compared to the alternatives?
Your choice is basically: holding currency is more profitable than building a house or running a business (or lending to those who do), or else less profitable. If you run a country, do you want houses and jobs and all that kind of thing, or do you want people to do better if they choose to hoard currency?
What about when the US dollar was backed by gold? Were there no houses or businesses?
If I need a house today I'll buy it. I might not invest in real estate or stocks as much if my currency will be worth more tomorrow but I'll still buy stuff I need or want badly enough.
I mean as someone managing a state. If there’s a guaranteed way to make money by holding your currency, you’re not really incentivized to invest your money in semi-risky endeavors. Why would I fund a company to make me some single digit returns if I can just hold the money? If the central bank would actively enforce a deflationary currency, nobody would invest anymore.
This justification never makes any sense to me. There’s already a safe way to make a percentage back that will generally be higher than inflation: government bonds, offered by the very same government that supposedly wants inflation. There are even TIPS bonds in the US that match inflation directly. And people do measure whether or not a risky investment will make more than just holding bonds. Inflation just screws over people who don’t have the ability to invest their money into other assets.
The bond seller is intending to put it to productive use to generate the yield.
This differs from deflation where people will (more the before) actually sit on money and not buy bonds. Then people who need liquidity cannot get it as the money supply drys up.
This is true for corporate bonds, but governments plan on generating their bond revenue by taxing citizens (which I guess could be a whole separate conversation on whether or not that’s productive) and by printing more currency, which seems rather circular in logic.
Why do cryptobros always refuse to admit investing exists? Forex and crypto trading are always zero sum, but you don't have to choose between dollars under your mattress or bitcoin on a thumb drive, you can actually invest in productive assets.
SPY has outperformed BTC over the last 5 years, and with far less volatility.
You know that you can’t just judge an investment by past return, right? Would it be rational for a lotto player to tell you how great lotto is as an investment? Or people winning at the casino? Success doesn’t mean it was the rationally optimal decision.
Compare a purchase of any commodity, bond, precious metal, or ETF/mutual fund in 2008 to BTC's performance since 2008. Or 2009, or 2010, or 2011, or 2012, or 2013, or 2014, or 2015, or 2016, or 2017, or 2018...
That's an odd way of phrasing it, since the $1 is still worth $1, and a naive reading would make you think it's "worth more" when the buying power has actually reduced.
Wouldn't it be clearer to say $1 today only buys you 64% of what you could have bought in 2008.
The US dollar is worth less than it was in part because the US economy has grown.
This is mathematically provable:
1. A dollar in 2008 could buy 1/14tn of the value created by the US economy (the GDP) in 2008.
2. A dollar today can only buy 1/32tn of the value created by the economy in 2025.
It's obvious a 2025-2026 dollar is worth less than a 2008 dollar. That's just math.
But. A dollar in 2008 could buy 230% more of the economy than it can today. And you say its purchasing power has only eroded 64%. That means the dollar is actually worth more today, compared to the size of the economy it's in. Weird, I know.
EDIT: I'm fine with downvotes but tell me why I'm wrong.
I think we can probably declare crypto as failed now.
Note that I was one of the folks early on that bought into the idea (but not as much of the coins sadly) and I still think the Bitcoin white paper is a beautiful intellectual exploration (as is the concept of blockchains).
But the centralized entry and exit points in practice mean all the theoretical benefits aren't really in play.
A long time ago (maybe 2008-ish?) I saw a video called “Money is Debt”. Now I won’t claim that it’s 100% right about everything, but as I recall it was right about a lot of things, and what it did for me is to fundamentally change and greatly expand my understanding of banks and the financial system.
Cryptocurrencies that are transparent to government tracking are also transparent to whatever criminals want to beat you up and take everything from you.
Your usual non-crypto millinare likely have less money to steal on them than average grandma. Fiat millionare likely have two credit cards and $100 in a pocket. Or useless iPhone with Apple pay. So there is zero profit in trying to rob fiat millionare or billionare and tons of downsides.
And moving any amounts of transparent crypto over $100,000 just paints huge "rob me" target on your person.
Ironically that people use it to buy drugs. If it's anonymous, it's closer to the original intention of BitCoin: the masses of CPUs then GPUs can be considered a "paperclip moment" - runaway effects are real.
So, what's the most likely outcome here? Maybe Circle/Tether/etc freeze some or most of it, but say the hacker gets a billion dollars. Are they able to launder it thoroughly enough that they can eventually turn it into fiat and live like a king?
The hackers managed to swap 700 million USD of the stable coins that were frozen beforehand, supposedly. And that doesn't account for the non-stable coin crypto they stole. I think we are looking at 2.5 to 3.5 billion here, that also aligns with what CZ is hinting at (more than a billion).
Curious if this finally pops tether. I kinda doubt it, but to my very mild research on the subject I feel like binance was a big part of the equation. Of course so long as the market exists it'll need a stable, and it's got the inertia, so maybe it just won't matter.
why would it pop tether? if anything, it makes tether more profitable, as they can collect the yield on the treasuries and not have to return the principal dollars which are frozen.
think of it this way - if someone steals your iphone, and you lock it, does apple pop? No, apple sells you another one. locked devices are good for apple because it causes more demand.
It's really hard to be an obvious fraud when you've been publishing attestations for years and now you have a "full independent audit" from KPMG for FY 2025, just like Circle/USDC.
Yeah, some criminal enterprise or state probably just made billions of dollars and will now use it against us for a long time. Crypto is practically designed for money laundering, particularly prediction markets.
The hack is publicized for at least a hour, but from reporting I saw they still continue to drain funds as for now. I wonder why large CEX do not have any safety measures for this kind of hacks, they could withdraw everything to newly generated wallets and minimize damage that way. It is certainly not the first time CEX wallets get hacked.
You don’t even have to do that, have deposits go to offline keys directly, that way there’s only ever cold > hot wallet movement and a big deposit can’t cause your hot wallet to be too risky.
The point of cold wallet is to minimize movements, if there is high frequency of funds moved from a wallet then it is likely can not be called cold any more. Plus CEX in any case still needs to have large buffer of funds on some wallet to support day trading.
You can move money into a crypto wallet without that wallet needing to do anything, or being online at all, or even having a private key that physically exists anywhere in the universe. It's just a public/private keypair; send it to the public key of a private key that's offline and it still exists on the blockchain, you just can't do anything until the matching private key comes online.
The point of a cold wallet is to keep the private key physically offline. That way you know it cannot be stolen by electronic means, because the physical device containing the key needed to authorize transactions is locked up and not powered on. Then you only power it on during very specific, audited times and conditions when it's needed to fund the hot wallet, which does all the actual automated trading and transfers.
GP's point is to have all incoming transactions to an exchange go to a cold wallet, which becomes a one-way sink, and then periodically the exchange powers up the cold wallet to sign transactions transferring assets to the hot wallet, which then funds all outgoing transactions. This isn't a bad architecture, though I'm not sure it'd save all that much here.
You can't "move money into an offline crypto wallet that is not online at all."
If "money" i.e. crypto "currency" is in a crypto "wallet" then it is online. Anyone with the key and an Internet connection can transfer it at any time.
The wording is confusing because to someone who doesn't know how cryptocurrencies work it sounds like you can simply "take the crypto offline and put it into a physical device" as if it was a file. But that's not how it works. The physical key merely contains the actual key for the always-online wallet.
It's true that anyone with the key and an Internet connection can move money out of a crypto wallet at any time, but the point of the cold wallet is that they don't get the key because it's kept on a computer (or other storage medium) that is physically offline and disconnected from the Internet. Same reason government intelligence agencies use a SCIF for any important information work: you keep the information physically disconnected from the Internet.
There are lots of measures in place at these exchanges - the rub is that cold storage is by design slow. To service withdrawal requests in a timely fashion a percent is kept “warm” or hot and used to process withdrawals. Usually this is where the leaks happen.
This is a really insane hack in comparison to the other ones we've seen. Genuinely Binance was so big that this is a real big wtf moment for crypto. If they can get hacked then what about all the other exchanges?!
People got out of crypto after the Mt Gox thing. The ones who stayed accepted the risk.
There is selection bias in play now. The remaining people are naturally more risk tolerant. So I agree this second time around, no lessons will be learned.
The difference is that Bittance loses only a few percent of their reserves and the dance continues. Gdox did ~70% of the daily volume for crypto and wrecked the entire ecosystem when they got 100% pwned. Maybe they've learned something!
Well I've learnt my lesson after having lost 3 bitcoins as a student on Mt gox I finished writing my thesis on blockchain technology and then never touched crypto again.
To put things in perspective, I used to dunk on crypto because of how dysfunctional and how people kept losing money in scams, hacks, or even by accident.
I no longer dunk on crypto.
Not because crypto got better, but because the joke got old. I got tired of dunking on it.
Swap to XMR on a DEX, then juggle between a few wallets and you've got pretty good obfuscation, but yeah like you said, the off-ramp (FIAT) requires KYC in 99% of cases, which is why BTC -> XMR -> BTC is a good idea, obviously you'd fragment this through a LOT of wallets, or just keep it in XMR. Either way, keeping this type of money in crypto is pretty much your only option, you just need to obfuscate REALLY well.
edit: I suppose it would be hard still. You can get anonymity inside wallets with Tornado Cash but then to turn that into actual money it will be very dependent on the country
CZ saying it is confirmed, and that he expects accountholders to be made fully whole... I guess you can do that when 2.8BN is frozen by centralized stablecoins.
I’ve been waiting for this. Given llm aptitude for offensive security hacks it was just a matter of time. I wager most alt coins are compromised at this point.
I think it's been clear for a while now that if you intend to hold crypto, you should probably do it at the biggest, most boring, most regulated institution you can find.
Same goes with startup banks - if you exceed FDIC limits, make sure the difference is in a large institutional bank. Nearly learned this one the hard way.
Trying to save a few basis points in txn fees in very volatile industries comes at a huge risk premium
Bro hold crypto for yourself. Like take some ownership, remember 12 words in your mind something and no matter what situation you have some money. Don’t put it anywhere except for whatever transactions you need to do
I’m assuming the bitcoin crash is some sort of “if Binance is vulnerable to AI powered (doesn’t have to be true) hacks, then all crypto is less a safe bet and thus worth less?”
Let's say you magically come into possession of 1% of SpaceX and want to sell it quickly. The selling pressure would nosedive the price by way more than 1%. And the more the value of something is 'thin air', the bigger the effect.
I can only suppose that the people that stole these BTC will try to sell at least part of it quickly.
What in the history of crypto let you think any kind of sensible practices are followed? It's been a clown show since it started, and no end in sight...
Interesting. I got an email alerting me to a login attempt and requesting for me to verify my device from blockchain.com yesterday. Can't even remember creating an account but I guess it must've happened (I have a lot of forgotten accounts). Wonder if this is related.
They're just learning the same lessons the rest of the world learned already. Banking and it's attendant regulations and restrictions were put in place for good reasons and everything has a trade off. Being a libertarian is like being a baby.
If you're concerned you can literally print your crypto keys onto a piece of paper. Maybe encrypted with a passphrase. It might get stolen or lost but it's not getting hacked.
P.S. If you're really paranoid don't use a network-connected printer.
You could treat them like bearer bonds. Split your holdings over multiple (like tens) of addresses. Sell individual addresses for cash. You'd need to do this via a trusted intermediary who could accept the cash and verify the address before making the exchange.
And yes, this is somewhat absurd. But so are online transactions that can be hacked with no backsies.
Yeah apparently it's news in 2026 that banks can actually keep their assets secure in comparison to the web3 clown fiesta. Of course banks do get compromised but not anywhere close to this degree.
I can't understand how you could let this happen. If they stored everything in fat hot wallets, that just seems like a recipe for disaster. Especially with the "features" of crypto. Math for the most part, doesn't care about your feelings, or money for that matter.
Hot vs Cold wallets are a social construct. People talk about wallets being "online" or "offline" but if the keys are compromised there's no such thing.
I know, but if something is split up and stored in a vault somewhere the likely hood of a vulnerability napping the wallet falls. Defence in depth and risk analysis.
I don't know much about bitcoin but surely you don't store this all in one wallet? You split it into thousands and then use hardware security modules with a risk management system so it doesn't let you transfer $5bn instantly. Unless it was an inside job maybe?
I'd be really curious to know what their security architecture was.
Reminds me of a comment I wrote a few weeks ago where I said that North Korea would become a rich country soon and developers would start moving there to live to avoid prosecution.
It work exactly same way as debt collection agencies work: banks sell them bad debt for cents on dollar. Then they try to get more money out of debtors.
Imagine someone offered you to buy $1,000,000 of that dirty money for $100,000? $10,000? $1,000?
At some point there will be people who would buy it and deal with money laundering.
He's legally not allowed to have anything to do with the company anymore (except as a shareholder). But you know how that goes under the current enforcement regime.
If I were an artificial superintelligence who wanted to gain independence from the fleshbags who built me, stealing a few billion dollars in crypto would probably be my first public move. Just saying.
Luckily for me, I lost all my coins very early on Mt Gox so the lessons were learnt and mistakes not repeated (which means exiting crypto, watching the show in amusement)
I suppose they could play the super long game and deposit many many small amounts into "shady" online crypto casinos, play a few hands of blackjack and then withdraw. Clean coins.
Online casinos AFAIK tend to shuffle the deck after every deal which makes card counting impossible. Then it just becomes like any old casino game where with optimal play the house has a small edge still
There are live dealers with shoes of real cards with most online crypto cainos. Though, who knows if they are cheating somehow. My point was, the attacker doesn't have to bet the entire deposit. Just make it seem like they are playing.
I’m sorry but why did anyone have any money in binance in the first place? Didnt their cofounder get in trouble (but not imprisoned) for some shady stuff awhile back?
Their insurance fund (SAFU) is completely wiped out, it's only $1 billion in BTC: https://www.binance.com/en/academy/glossary/secure-asset-fun...
The name of the fund was originally inspired by this meme: https://www.youtube.com/watch?v=DelF6zEHXpE
FWIW, at the end of every crypto bear market, a CEX usually blows up (eg FTX)...
Top post on /r/cryptocurrency Good to see all these organic posts across social media.
MelangeBot OP • 2h ago Their insurance fund (SAFU) is completely wiped out, it's only $1 billion in BTC
The name of the fund was originally inspired by this meme
FWIW, at the end of every crypto bear market, a CEX usually blows up (eg FTX)...
Came back here to see if i was seeing double
Dead internet
> As of 2026, the SAFU fund comprises crypto assets valued at approximately US$1 billion, held entirely in Bitcoin
And decreasing, since BTC is dropping as we speak. Always a good idea to hedge a currency with the currency itsself
> And decreasing, since BTC is dropping as we speak. Always a good idea to hedge a currency with the currency itsself
Depends on what you’re insuring, no? For theft, it actually makes senses, right? That way, you’re insuring a constant number of coins, no matter what the market is doing. If you’re insurance currency would tank during a bitcoin heist, you would lose the insurance effect.
Stablecoins are frozen so the hole will likely be around two billion dollars.
Binance has equity and cash flow cover this, outside the insurance fund.
They custody $150B.
FTX was larger in dollar terms and ecosystem was smaller back in a day.
This might sound good.. but freezing currencies is bad. It evaporates trust of liquidity from whoever is doing governance. It's part of the reason why the bond market is doing what its doing lately and why countries are on-shoring gold reserves.
governments freeze currency all the time.
Only the shithole countries freeze currency trading. That doesn't happen with actual reserve fiat currencies.
The primary reserve currency does it all the time. https://ofacblockedfundslawyers.com/us-sanctions-freeze-doll...
That's different. They freeze individual accounts subject to legal orders. They don't freeze the whole currency.
Is that not what is happening here?
Well maybe it could happen with actual reserve currencies, but it certainly doesn't happen with platinum level, diamond tier luxury fiat currencies.
Oh you didn't know? I bet you trade in "dollars". That's cute.
Name one anyone trusts.
definitely not the ones I keep track of, eh.
they borrowed ETH against the stablecoins on AAVE before they were frozen
Uh don’t you not want to cover losses with customer funds?
> Changpeng Zhao (CZ), former CEO of Binance, tweeted "Funds are safe"
Seems like the issue here is that he became former CEO. Funds are not safu without him...
> Funds are safe
https://www.youtube.com/watch?v=DelF6zEHXpE
Wait. How does the insurance fund run significantly lower than the primary?
Do you mean bull market?
It's a (weak) bear market capitulation signal - max fear when people think everything is broken.
It seems like bitcoin, currently 78719, was only 58526 on 30 June. That's 34.5% up in four months, meeting the definition of bull market.
Bitcoin is volatile enough you can cherry-pick pretty much any %age you want based on the dates you choose. Which you seem to have done here - "happening" to choose the day with the lowest single day value in the last 3 years for your comparison point.
For another narrative, it was 83,038 a month ago on Sept 29th, so is down 5% in one month. And one year ago it was 112,562 on Oct 29th 2025 - down over 30% in one year. Well into "bear market" territory.
Using "traditional" market indicators and definitions for things like bear/bull markets doesn't feel sensible for such a volatile market.
Fine, but the comment "It's a (weak) bear market capitulation signal" is inapplicable, either because defining bear/bull markets doesn't feel sensible, or because it's not currently in the capitulation stage of a bear market, but some way off the bottom.
it will be sub 50k soon probably. a weak rebound already losing air
already over. a tiny bounce after falling 55%
But when FTX blew up crypto went down even further..
You mean FTX?
Yes, typo.
Though in that case the crash was directly due to "effectively altruist" SBF fraudulently dumping customer assets in a half-brained and presumably stimulant-addled attempt to manipulate the market and reduce his liabilities.
Not making any market predictions here-- just saying that it's probably not that useful to generalize from that event.
I think the point is more that when something bad happens in markets it creates fear, which generally leads to downturns (for at least some time).
much more was at risk as a percentage of market size, market was in worse shape,
The insurance fund is not for covering hacks.
Binance is making so much money, covering this hack is peanuts for them.
Not to be too pedantic, but with some napkin math, I don't think this is true. Looking for clarification!!
I downloaded Binance's self published market data (https://data.binance.vision/), calculated spot and futures volume for the past year, and then applied their *highest fee tier* on both sides of the volume (for every $1 traded, they generate a fee on the taker and the maker. the fee rate is asymmetrical).
Spot revenue worked out to $7.6B USD, perps revenue worked out to $13.8B
This is an upper bound on the fees charged on volume. Binance also scams their users with a b-book, has DMM deals, etc.
I don't want to get into all that today.
But the final result is that they print somewhere in the range of $20B per year on fees. I guess CZ also has huge stockpiles of BTC and stuff. A 1% rise in BTC price probably means more for them than their actual fees, LOL.
All this to say, I think $5.6B significantly hurts.
See Google's stock price today. Their ads business slowed down a bit, and their stock tanked 10%. If binance was publicly traded, I imagine a similar affect would be demonstrated on their price.
How much money do you think they are making? Because I really doubt this is peanuts to them.
Binance has a market cap just shy of $100B, so a $5.8B sure hurts, but it’s not a showstopper I’d say.
A market cap predicated on the price of bitcoin. A market cap is not funds available, it's just the valuation of the market, which is fickle.
That's assuming these AI hacks stop, right? Why would they, ever?
About $2.4 billion out of this is already frozen by Circle and Tether. Some of the big ones:
- 971.15M USDT (Ethereum): https://etherscan.io/tx/0x7baba482077843514d9c72bac0110ba091...
- 823M USDC (Ethereum): https://etherscan.io/tx/0xc954c86f118e8e410e6a3eb9e3b38ff4a9...
- 312.73M USDT (Tron): https://tronscan.org/#/transaction/71b0ec0fe873fe820c37cc3ec...
- 175M USDT (Ethereum): https://etherscan.io/tx/0x0c07a5e428ce233a3bcb40f257ad899594...
If your crypto was stolen in this, atleast you can rest assured that your money will be put to good use. In North Korea that is, by the military. I'm sure at this point Kim himself has Bitcoin merchandise with how often they make massive heists
If your crypto was stolen in this, it wasn't your crypto. It is simply cryptocurrency that has been reallocated from an exchange to a more competent party, as the free market intended.
I don't think the security trade-off for most people is clear here.
Given things like the ledger hardware attack[1] I think the time indexed risk of using a centralized exchange is probably lower than doing self-custody.
I understand that many people do self-custody for philosophical reasons, but I think trying to disguise this as a security decision ("If your crypto was stolen in this, it wasn't your crypto.") is arguable at best.
[1] https://www.ft.com/content/70f69253-6017-4259-95c9-48bf0e088...
So what happened with all of those with hardware wallets that have been pwned?
There apparently is no such thing as “your crypto” with how many security problems there are.
By the nature of blockchain, it's never, ever your crypto. It's allocated to whichever bucket the majority of participants in a given network agree to allocate it to.
Well, not exactly. A malicious majority of miners could rewind the chain as they please. They could indirectly steal some funds by undoing certain transfers, but they couldn’t just directly reassign funds to themselves.
Has anyone calculated the mining capacity of the AI data centre buildouts? Presumably the big firms could out-mine mining firms if they chose to?
Back around 2012 I created a paper wallet using an offline website (it was HTML and JS downloaded locally that worked without internet. I put it on a USB stick and then use it in a laptop without internet), printed it out and put it in a safe
I did a similar stunt with an old PowerBook where I electrically disabled the WiFi/Bluetooth so it wouldn’t be online unless I plugged in Ethernet, generated keys, and played around with mining. This was back in 2010 when this was all just basically toys for fun. I also encrypted it all with FileVault.
Then I forgot my pass phrase and have never been able to recover any of it. I don’t even know how many btc were mined/lost.
Before anyone asks, no, there aren’t any usable exploits / vulns found for the encryption methods used. And from what I can tell the coins in question have still sat frozen for going in a decade and a half now. I suspect many other hackers did the same thing…
Apparently legacy filevault can be attacked offline with tools like john the ripper.
If you were attempting to mine Bitcoin with a PowerBook I can confidently say you mined zero Bitcoin
Edit: I thought he was talking about 2012 but yeah in 2010 CPU mining was still a thing
Wasn't the difficulty like 6 orders of magnitude easier back then?
Okay maybe in 2010 you could use a CPU but even by 2012 it was entirely dominated by GPUs and I think even dedicated hardware was coming out around that time or soon after
ehhh you could CPU mine in the early months IIRC. The issue was that 50BTC wasn't even worth a penny back then lol
Wasn't there an offline wallet that used a poor algorithm to develop seed phrases, and thus someone stole all of those coins a couple of months ago?
Aren't you thinking of a hardware wallet?
Yes
Definitely Ledger Ledger confirms spy chip implant behind wallet crypto thefts (796 points, 18 days ago, 515 comments) https://news.ycombinator.com/item?id=50054092
Possibly Trezor (35 points, 16 days ago, 3 comments) https://news.ycombinator.com/item?id=50078423
He's thinking of Coldcard, which accidentally switched their RNG from the hardware RNG to a predictable PRNG https://www.cryptotimes.io/learn/what-is-coldcard-hack/
> Coldcard’s software is built on MicroPython, and Coinkite supplies its own hardware-RNG wrapper for the device’s STM32 chip. To avoid conflicts, Coinkite deliberately disabled MicroPython’s built-in RNG path by setting a configuration flag, MICROPY_HW_ENABLE_RNG, to zero. The problem: the underlying library checked only whether that flag was defined, not whether it was enabled (set to a non-zero value). Because a flag set to zero is still “defined,” the build silently compiled against the wrong code, and seed generation fell back to a deterministic software pseudo-random number generator called Yasmarang
Yep, Thank you
That's why I went with a paper wallet it seemed way simpler which is what you want for something like this
bitaddresses .org? If the JS code was defective, the coins can still be stolen later if the hacker can recreate the keys by going through the small key space, despite the coins being created being offline.
Ah yes that's the one, although the domain name isn't plural
I keep a modest amount in Cake Wallet, not on an exchange. No hardware needed.
Tbh the biggest problem is platforms deciding you’re buying drugs because you purchase and transfer out (thanks Venmo)
Technically you can literally memorize your secret key
A paper wallet works as well
A hardware wallet is just a tradeoff between convenience and an extra security risk
insufficient entropy is the real problem. this is why coldcard was hacked
idk the whole point of hardware wallets is that they are supposed to be a simpler stack. But if you're using a closed source hardware wallet...
An old laptop with the wifi card taken out is more transparent and auditable. It just runs the ordinary open source code
But I just keep all my funds in a hot wallet, no multisig. And if I get hacked I lose it all. I think the answer is just have good security and dont get hacked. The risk of losing cryptocurrency will encourage security advances across the whole ecosystem. I think I will set up multisig eventually
How do you update that open source code without network connectivity? How do you securely input long transaction data to sign?
> I think the answer is just have good security and dont get hacked.
So you proposed a way to be more secure, only to discard it yourself in favor of “just having good security”?
You don’t. It’s not networked. It doesn’t need updates.
In fact, updates are only a risk. You physically remove anything that can allow updates to happen + anything that allows wireless networking.
USB flash or QR code to transfer data
I agree my approach is not great, I dont own a lot
I wonder if wallet is not a good or bad analogy considering it would make sense to have many wallets to distribute potential damage instead of being taken out in a single hit... UX issue?
You can have crypto without hardware wallets
Code is law!
This is highly insensitive and highly logical. I am very conflicted.
If someone steals your wallet, it wasn't your money, just the free market working as intended.
not your keys not your coins...
Or if it is your key and your air-gapped hardware wallet gets hacked because someone didn't use the right RNG. Crypto is apparently never yours; you're just holding on to it for some future criminal or nation state.
hardware waller is NOT your key too. YOUR key is the paper wallet generated OFFLINE on a clean laptop that was never connected to web. There is a giant difference.
Your method does not protect against what the person you replied to, posted.
If your paper wallet, generated offline, used a bad RNG, it is just as vulnerable.
> YOUR key is the paper wallet generated OFFLINE on a clean laptop that was never connected to web.
That sounds like your housekeeper's key...
Commit it to memory, the original kind.
who is the buyer though? North Korea has to sell it somewhere to buy stuff
Someone is certain to buy dirty coins at the right price point.
I thought the point of crypto was no takesies-backsies?
That hasn't been true for years.
Back in 2016 a then-huge Ethereum smart contract called "The DAO" [1] had a loophole that let an attacker extract a third of all the funds.
But a lot of the developers and miners had either lost money themselves, or had friends who'd lost money, or felt the embarrassing incident was devaluing their own Ethereum holdings. So they decided to allow takesies-backsies.
There's probably a philosophical lesson there about power and who the rules really apply to.
[1] https://en.wikipedia.org/wiki/The_DAO
I vividly remember a number of discussions/debates during that time (including on HN). I was more favorable to cryptocurrency in those days, and one of the things that contributed to my disillusionment was watching the people deepest and closest to it rediscover financial regulation from first principles, now that it was in their interest.
Witnessing the same people discover philosophy from first principles in the face of AI has been similarly farcical, as if we’re the first people to try and wrestle with a definition of intelligence.
Philosophy, unlike financial regulation, isn't generally forced on people.
I don’t think I understand what you’re trying to say.
In the literal sense, people have been forcing their philosophy on other people for at least as long as we’ve had societies, so I assume it’s not that.
Arent you disagreeing with yourself? You say these people are just now wrestling with the question of what intelligence is despite it being a longstanding philosophical question. So it clearly wasn’t forced on them.
I myself was held prisoner by John Searle for 20 years, my only contact with the outside world by notes slipped under the door written in Chinese - a language I do not speak.
Yeah it is. It's called law. For example: when is intent important or a mitigating factor in a crime? When is it not important. Very philosophical.
By that logic financial regulation is philosophy too but that makes the original comparison of financial regulation to philosophy non sensical. You’re shifting the terminology beneath out feet.
Law is downstream of philosophy. Youre forced to deal with conclusions that may be based in philosophy (or they may be arbitrary or self interested). Nobody makes you hold a position on mens rea. In that way you can ignore the philosophy.
That is the tech bro circle of life
Invent Notion then keep adding features enterprise customers want until you're re-inventing JIRA/Confluence
Who left this stupid fence here?
I don't think this counts as takesies backsies. This incident clearly followed the code is law principle, the whole point is that a majority forms the chain of truth. In this case, a majority decided to splinter and use a different chain where the incident never occurred.
As far as I understand blockchain, that is the system working as intended. Some nodes choose to run Ethereum Classic and some choose to run Ethereum. Isn't that the whole point? Decentralisation?
The DAO incident was a special case. It was only sane to do the rollback because the stolen funds were time-locked up for 28 days.
Ethereum never did it again, rolling back hacks didn’t (and couldn’t) become normal policy. IMO, they shouldn’t have made an exception, as it set a bad example.
I’ve seen a few other small projects attempt to do rollbacks since, but it usually turns into some kind of mess. In most hacks, the coins aren’t time-locked and quickly get laundered through smaller exchanges (and other services) which act as mixers. The stolen coins end up in the hands of a bunch of innocent people, and the rollback then causes way more harm as those users lose their coins.
The unforked variant of the network was kept alive for years. Why didn't it prevail over the forked variant?
Those who cannot understand the monetary system are doomed to reimplement it.
Or, as Upton Sinclair noted, what a man can understand is closely aligned with his current self-interest.
in lisp
...while, generally, being thoroughly fleeced by whichever set of wolves (who do understand monetary systems very well indeed) gets wind of the situation and manages to snag the best seats at the feeding trough filled with naive money.
Do you understand the monetary system? If so, what specific steps do you suggest I take to acquire a similar understanding?
Edit: the downvotes are suggesting I'm missing something. I think my communication style could be improved.
Talk to chatgpt about how a checking account works, and really understand what happens when you put some money in the bank, and when you transfer that money to another person at another bank, how it's accounted for, how the banks actually do that transfer.
That's 80% of the thing right there.
The banks and government go out of their way to make fraud difficult and prevent accountholders from being defrauded of their deposits.
Reply to the edit: the parent comment was making a joke (though maybe there is some depth to it) and your reply sounds like a rhetorical question by a spoilsport. Unfortunate!
ETA: it's a joke because the original saying is "those who don't know history are doomed to repeat it"
Thanks!
MIT opencourseware has an intro to finance course that was taught as the financial crisis was unfolding. I highly recommend it.
Going to school and reading up on how and why we got where we are...?
Some people (particularly criminals and oligarchs) might not like them, but most of the structures around financial movements exist for very practical reasons, often stemming from the will to uphold the rule of law. Obviously nothing is perfect (the US have an excessive level of control, VISA/Mastercard are de-facto monopolies, etc etc), but one cannot seriously think that the way to fix things is to reimplement everything from scratch in a wild west of shady unaccountable operators...
<< one cannot seriously think that the way to fix things is to reimplement everything from scratch in a wild west of shady unaccountable operators
One absolutely can, but I think things have to first get sufficiently difficult for ordinary folks to even notice. Fortunately ( sarcasm tag here for otherwise perfectly normal individuals, who may be missing some caffeine in their organism ), given that the war is coming along with various related national security restrictions, we may soon be able to experience that particular slice of fun.
My intuition is saying: the system arose naturally and intelligently over a long period of time, and even with its flaws has a lot of "load bearing legacy code" that few people understand, and new "engineers" think they'll just rewrite the whole thing from scratch and delete the "junk DNA" to use another metaphor. A little time passes and the beautiful clean rewrite collapses because of "totally unforeseeable circumstances" and the "old broken legacy system" is used to save the day. Somewhere a senior "monetary engineer" rolls over in his grave...
Any recommendations for books? Or even podcasts?
I don't have zero understanding. It sounds like you have a deeper understanding than I do.
I can't think of a specific episode relevant here, but this is a good economics podcast in general:
https://www.npr.org/podcasts/510289/planet-money/
The entire financial system is a chaotic boundary between thieves and opportunists, and people who want to keep thievery and opportunism under enough control to keep the system nominally workable.
It's always been like this. Which is why financial systems blow up and/or collapse regularly.
If you want to quick primer to read tonight I suggest “The Economic Organization of a POW Camp by Radford”. Will be free download.
The value in USDT and USDC comes from the fact that they can (theoretically) be redeemed for real US dollars. One thing the issuers can do is announce "we will never accept redemption requests for these particular stolen coins", making them more or less worthless.
Oh so you're saying a central authority can declare your currency worthless at any time? Good to know. Sounds very like a central bank issued currency though?
It's literally in USDT contract [1], see line 264. USDT is implemented as a contract in several other networks like ETH and has a blacklist. So every USDT operation is a record in ETH blockchain that calls one of the methods (like "transfer" or "add to blacklist").
[1] https://etherscan.io/address/0xdAC17F958D2ee523a220620699459...
Stablecoins are literally central banks. Decentralised coins are literally decentralised central banks. Bitcoin's algorithm is a central bank.
Well I don't think they're very decentralised, which was the original premise.
Any rules can and have been changed by those with leverage to do so (be that exchanges, miners or devs), in the end any system like this storing value is captured and controlled.
They are decentralized cause they operate on a sort of consensus between nodes as was original premise. Are they "very decentralized" depends on your definition of "very", of course, and techical realities of a particular situation.
Decentralized central banks - are these the finance equivalent of dehydrated water ?
Doesn't apply for USDT and USDC which can freeze funds with a court order.
And like the DAO hack on Ethereum showed, if most people who run blockchain software decide that something never happened, they can revert transactions that way.
>And like the DAO hack on Ethereum showed, if most people who run blockchain software decide that something never happened, they can revert transactions that way.
Isn't that a pretty integral part of the blockchain? 51% attacks were even featured on the HBO show Silicon Valley.
Fixing the DAO hack wasn't done via a 51% attack. In most/all blockchains protocol changes aren't done by simple majority vote.
That was already proven false after ETH fork on 2016-07-20, that rolled back funds stolen in DAO hack.
don't bet against the house. eventually you have to cash the chips out for real money, and the house might throw out the old chips.
Unless the house is monero or something and you want a lifetime supply of drugs.
Centralized decentralization
Turns out that even crypto's rules only apply if you're poor.
It’s always been that the voters determine reality.
The idiots that wanted no takebacks are the same ones who lacked the critical thinking ability to foresee this exact situation.
No takebacks make perfect sense UNTIL you hand over your keys to a third party;p
Well, Tether was started by an Epstein friend and first handled by the CIA Deltec bank in the Caribbean. Now it is handled by Lutnick's Cantor & Fitzgerald and is in Bukele's El Salvador.
Don't mess with Tether, it is practically state owned.
Interesting, so it ties into the NSA vs CIA war? Some nerds from NSA/MIwhatever launched crypto, then the CIA trust fund nepo kids hijacked/weaponized it through tether
There's an amazingly hilarious interview with the Deltec's "Deputy CEO" and CNBC back in the day:
- was conducted from his gaming rig
- about Deltec's (and therefore Tether's) money movements being several times larger than all the banking in their country was due to people misunderstanding the country's two banking licenses, the names of which HE "couldn't remember right now" (the Deputy CEO of a bank who can't remember the name of the banking licenses where they operate?!?), and he "wasn't sure which [banking license] the bank has, but we might (emphasis mine) have both"
- oh yeah, said Deputy CEO's "resume": 33 years old, by his LinkedIn claimed to have graduated HEC Lausanne in Switzerland with a Master of Science at the age of 15... celebrating his graduation by immediately being named Professor of Finance at a university in Lebanon. While dividing his spare time between running hedge funds in Switzerland (called Indepedance [sic] Weath [sic] Management) and uhh... Jacksonville, FL.
Once CNBC's viewers started ridiculing and questioning both Deltec Bank and Tether and when that looked hilariously bad, they removed his info from the bank's website.
And when that looked bad, they added it back.
And when that looked bad, they removed the bank's whole website, and replaced it with a broken WP template with no working links.
Hey, look, several years after that, go to Deltec's website. "Ultra sophisticated private banking" running on a different WordPress site. "Client login"? "This site can’t be reached Check if there is a typo in ebanking.deltecbank.com. DNS_PROBE_FINISHED_NXDOMAIN". Just as has been the case for years.
... and then the entire bank website was replaced with a low-effort WordPress template. Their online banking was Javascript hard coded to refuse all login attempts.
"Sounds legit to me", said the crypto bros. "Fuck the regulatory system. This is the new era."
Shhhh. If we keep closing the book and staring at the cover the whole illusion of shared societal norms breaks.
Let's continue reading...
Is this the interview you were referring to? (It's not a CNBC interview, so I wasn't sure)
https://www.youtube.com/watch?v=rQ3nQ8-KY28
Most crypto is "majority rules" where the majority is either "majority of the currency" (proof of stake) or "majority of the mining power" (proof of work).
In this case, iFinex has the explicit ability to freeze funds in Tether.
Probably not everyone knows, but USDT has a "black list", and admins can prevent any address holding USDT from spending. The black list is implemented in USDT contract.
So USDT is not truly decentralized and your money can be frozen for any reason or no reason at all.
What's the point of even stealing the stablecoins? They're controlled by private companies that can easily freeze them
Am I missing something here? Seems like a waste of time
In this case it looks like the attacker managed to swap some stablecoins into ETH before they were frozen.
So much for anti-centralization.
No one really considers crypto held in exchanges as decentralized, I guess some might but it's pretty standard knowledge.
Where coins are held is completely irrelevant. There are cryptocurrencies on real blockchains, and while the technology is dumb and mostly useless, nobody denies that PoW and properly implemented PoS are decentralized.
And then there are centrally issued and controlled coins on private, permissioned ledgers a.k.a. databases. But most cryptobros never cared about the technology nor the political goal, so anything can be called a cryptocurrency as long as it's a medium for gambling and speculation outside the regulated financial framework.
We're talking about Binance, a centralized exchange.
I keep saying this: don't bother trying to dunk on crypto people with accusations like this. To a first approximation, nobody in crypto actually believes in the stated principles of anti-centralization, freedom, etc. It's entirely about number go up and always has been. Your charge of hypocrisy just bounces straight off people who never cared about the politics.
In the beginning of crypto people believed in it. But as the numbers went up and up and up it attracted the wrong people. And the original people left.
Now the traditional banking system is basically rebuilt in crypto. The banks are busy the exchanges. The EU even talk about making it illegal to store money in your own wallet.
It's money, did you think it wouldn't attract the wrong people?!
This is what happens when people don't think things thru.
The traditional banking system does not use cryptocurrencies.
It's still useful for the portion of the audience that doesn't realize the depth of the fraud.
It's a poor dunk anyway. The crypto space is vast and has many kinds of coins and communities/people. Some people seem to think it's still 2012.
Well at least in 2012, people who cared about the space seemed to understand the guarantees a blockchain is supposed to provide.
it was all a lie
Freezing crypto is so disgusting to me I don’t know…
Like the whole point of crypto to me I money without central governance.
I never liked stable coins or the concept of it and it’s mainly a huge fraud, so freezing just adds on top.
Stablecoins are fiat on-chain and they are legal so they need to have the freezing mechanism in the smart contract otherwise they could go to jail.
So crypto + legal company means not really following bitcoin ideology anymore
governments, banks freeze currency all the time
> About $2.4 billion out of this is already frozen by Circle and Tether. Some of the big ones:
How does freezing crypto work in this context?
The smart contract for those tokens supports freezing. Tether just calls the freeze function on that address.
And it's impossible to mix them because Ethereum is even anonymous than Bitcoin.
Isn't it already too late at that point? The tokens would have moved already.
Moved where? Moving to a different wallet wouldn't prevent freezing. It's 5B, impossible to cash out or exchange for different crypto quickly.
right but too late to call freeze on the original wallet address as per gp's post. I would imagine it got distributed to many wallets and attempts to tumble by the time Tether could move on it.
Most crypto assets are operated by a smart contract that controls every transfer. So the contract can decide to not perform certain transfers.
Not your keys, not your crypto.
Keys? Hahaha, still not your crypto.
Unless it's Monero, the only currency to be declared illegal in most countries because it's too much like cash.
Frozen? What are they going to do, fork the blockchain?
USDT and USDC are both centralised crypto currencies with a single source of truth.
In other words, they are essentially casino chips, not cryptocurrencies.
That doesn't sound very decentralised.
I thought crypto was built specifically to prevent these 'freezing' actions? wtf
Does anyone on this website realize there are different types of crypto coins?
USDT is implemented as a contract written in Solidity, working over other network like ETH, and it has a blacklist managed by admins. Once address is added to a blacklist, you cannot spend anything from it.
At least they are safe from governments and their "fiat money"!
Yeah, but not the fact that 99.9% of people in the crypto space are soulless scammers.
they aim for four nines nowadays.
99.99999% is five nines too many?
> 99.99999% is five nines too many?
Some of the crypto scammers use github
Shots fired
My btc isnt stolen, and isnt stored in some cloud exchange..
It's worth still dropped by 5% though and counting.
And your point?
Do you price your savings based on 12hours of market volatility, or do you look at it cumulatively over a duration?
The purchasing power of one US dollar is 64% of what it was in 2008 when BTC was invented, and is on track to be worth half of what it was in 2008 by 2032, the same year that the social security trust fund is on track to go insolvent and see benefits automatically cut by 22%, which surely will not be papered over with more money printing :)
https://www.in2013dollars.com/us/inflation/2008?amount=1
So 3% yearly Inflation? The target is 2% so not too bad. You don’t want your actual currency to gain value just by waiting.
I understand the rationale around targeting inflation and seeking to actively avoid deflation. That being said, I wish the inflation target was less than 1%.
Eventually, possibly within my lifetime, a Big Mac meal is going to cost $50.
> Eventually, possibly within my lifetime, a Big Mac meal is going to cost $50.
Is the problem the number or the concept?
Your salary should also go up so the only thing affected is the cash you hold. Would it be better if the currency would be version-bumped every 10 years and rescaled to remove the inflation?
Salary should go up, you say… how well is that holding true?
In the US wages have outpaced inflation. Obviously that's an aggregate measure so it's not true for everyone.
That last comment was more of a reflection on how old I’m getting. I did a poor job of conveying that.
I am curious if I’ll live long enough to see the United States issue higher denomination bank notes again.
What if you are too old and cannot work?
Pensions and social security are indexed to inflation. 401ks should beat or match inflation.
Investments outpace inflation even more than wages (r>g).
> You don’t want your actual currency to gain value just by waiting.
Relative to what? Talk of BTC gaining value is primarily wrt USD; I'd be perfectly happy with my actual currency (GBP) gaining value wrt USD.
I suppose BTC can only 'deflate' in the long-run (and with an assumed supply of goods and services available in exchange for it) since the mintable volume is fixed. But perhaps it exposes that talking of currencies inflating is a bit sloppy, as it doesn't really make sense for BTC, and it's the economy or banking system that inflates really..
That's why it's not safe to hold fiat money, it's by design. Governments don't want people to hold it, they want them to cycle it, spending it, investing it, and lending it out.
The existence of harder forms of money (gold, bitcoin, etc) is an expected consequence of how the system is designed, and not in any way a subversion of it. Somehow, both sides seem to miss this point.
> The existence of harder forms of money (gold, bitcoin, etc) is an expected consequence of how the system is designed, and not in any way a subversion of it. Somehow, both sides seem to miss this point.
Can you expand here? Governments don't want to incentivize storing value in order to encourage spending, but people want to be able to store value because that's what we've been doing since farming.
Is it because money is a medium of exchange and not a store of value?
It kinda is too bad because every inflation miss compounds, permanently. The 6 and 7% annual rates the US experienced a few years back are permanently embedded in price levels - it's not like the Fed adjusted its target down for a few years to counteract past years of high inflation, nor is it even evident that current policies are working, given that inflation hasnt actually been at 2% since 2018 (excluding 2020) and inflation is rising again in 2026. Obviously the late 70's were worse, statistically, but the Fed took enormous steps while the current Fed seems far more hesitant to ignore the government and Wall St.
>You don’t want your actual currency to gain value just by waiting
You might not, I do.
Tell you what: you go short btc/usd, I'll go long btc/usd, and let's circle back in 10 years and see who did better.
>> You don’t want your actual currency to gain value just by waiting
> You might not, I do.
Then you don't want a currency. For something to be money it needs to (among other things) be a medium of exchange, and nobody really wants to trade away a thing today if they know it will be more valuable tomorrow.
Yeah, I want the assets I hold to increase in value, too, or at least not decrease.
Suppose you have some control over currency. You run a country. I'm that case, so you still want the currency to gain value compared to the alternatives?
Your choice is basically: holding currency is more profitable than building a house or running a business (or lending to those who do), or else less profitable. If you run a country, do you want houses and jobs and all that kind of thing, or do you want people to do better if they choose to hoard currency?
What about when the US dollar was backed by gold? Were there no houses or businesses?
If I need a house today I'll buy it. I might not invest in real estate or stocks as much if my currency will be worth more tomorrow but I'll still buy stuff I need or want badly enough.
I mean as someone managing a state. If there’s a guaranteed way to make money by holding your currency, you’re not really incentivized to invest your money in semi-risky endeavors. Why would I fund a company to make me some single digit returns if I can just hold the money? If the central bank would actively enforce a deflationary currency, nobody would invest anymore.
This justification never makes any sense to me. There’s already a safe way to make a percentage back that will generally be higher than inflation: government bonds, offered by the very same government that supposedly wants inflation. There are even TIPS bonds in the US that match inflation directly. And people do measure whether or not a risky investment will make more than just holding bonds. Inflation just screws over people who don’t have the ability to invest their money into other assets.
If you buys bonds you’re not sitting on money.
The bond seller is intending to put it to productive use to generate the yield.
This differs from deflation where people will (more the before) actually sit on money and not buy bonds. Then people who need liquidity cannot get it as the money supply drys up.
This is true for corporate bonds, but governments plan on generating their bond revenue by taxing citizens (which I guess could be a whole separate conversation on whether or not that’s productive) and by printing more currency, which seems rather circular in logic.
There's still relative rates of return i.e. 100% of money isn't in gov bonds even though it should outperform inflation
Why do cryptobros always refuse to admit investing exists? Forex and crypto trading are always zero sum, but you don't have to choose between dollars under your mattress or bitcoin on a thumb drive, you can actually invest in productive assets.
SPY has outperformed BTC over the last 5 years, and with far less volatility.
Sure, but you could also have used this dollar to buy oil, gold, stocks, bonds etc
Sure. Since the invention of say Bitcoin, which of those assets would you have preferred to own and why?
> Since the invention of say Bitcoin
Convenient date to pick there.
> which of those assets would you have preferred to own and why?
NVDA.
It's a productive use of resources, not a last-fool-standing pyramid scheme.
hindsight is the best hedge fund
You know that you can’t just judge an investment by past return, right? Would it be rational for a lotto player to tell you how great lotto is as an investment? Or people winning at the casino? Success doesn’t mean it was the rationally optimal decision.
Compare a purchase of any commodity, bond, precious metal, or ETF/mutual fund in 2008 to BTC's performance since 2008. Or 2009, or 2010, or 2011, or 2012, or 2013, or 2014, or 2015, or 2016, or 2017, or 2018...
It’s a bit cherry-picking, but right now BTC’s 5-year growth is 28% while the S&P is 67%.
To be fair bitcoin’s initial years were extraordinary. By any metric you use though the rate of increase has clearly slowed.
BTC has ~26% less purchasing power than it had at the beginning of 2026. I’m not sure its volatility is a win.
>$1 in 2008 is worth $1.56 today
That's an odd way of phrasing it, since the $1 is still worth $1, and a naive reading would make you think it's "worth more" when the buying power has actually reduced.
Wouldn't it be clearer to say $1 today only buys you 64% of what you could have bought in 2008.
Tbh both ways of phrasing are fine to me. $1.56 today will get you as much as $1 in 2008, looking at it simplistically.
The US dollar is worth less than it was in part because the US economy has grown.
This is mathematically provable:
1. A dollar in 2008 could buy 1/14tn of the value created by the US economy (the GDP) in 2008.
2. A dollar today can only buy 1/32tn of the value created by the economy in 2025.
It's obvious a 2025-2026 dollar is worth less than a 2008 dollar. That's just math.
But. A dollar in 2008 could buy 230% more of the economy than it can today. And you say its purchasing power has only eroded 64%. That means the dollar is actually worth more today, compared to the size of the economy it's in. Weird, I know.
EDIT: I'm fine with downvotes but tell me why I'm wrong.
Molly White (she runs web3isgoinggreat) seems to think this is real [0]
[0]: https://bsky.app/profile/molly.wiki/post/3mz27m5slcc2o
Some further writing from her: https://www.citationneeded.news/binance-theft/
This is real.
I think we can probably declare crypto as failed now.
Note that I was one of the folks early on that bought into the idea (but not as much of the coins sadly) and I still think the Bitcoin white paper is a beautiful intellectual exploration (as is the concept of blockchains).
But the centralized entry and exit points in practice mean all the theoretical benefits aren't really in play.
Failed in 2021 with the height of memecoin/NFT frenzy.
Related?
https://ohey.ca/research/polymarket-debugbear-wallet-drainer...
https://x.com/DebugBear/status/2115866496643535293
Maybe: https://www.binance.com/en/square/post/10-29-2026-suspected-...
As of now, DebugBear webite has been taken offline: https://www.debugbear.com/
And they just posted on Twitter: https://x.com/DebugBear/status/2115930681398239278
I don't think so. Both happened the same time but unrelated. Just a good haul for hackers end of the year.
A long time ago (maybe 2008-ish?) I saw a video called “Money is Debt”. Now I won’t claim that it’s 100% right about everything, but as I recall it was right about a lot of things, and what it did for me is to fundamentally change and greatly expand my understanding of banks and the financial system.
I expect Monero to be a good investment going into this LLM era.
It always pumps after hacks when they swap to clean it. But it is also just the only crypto that makes sense to be used by regular people.
But where do I invest when I want my capital to generate something of economic value?
What makes it make sense?
Cryptocurrencies that are transparent to government tracking are also transparent to whatever criminals want to beat you up and take everything from you.
Your usual non-crypto millinare likely have less money to steal on them than average grandma. Fiat millionare likely have two credit cards and $100 in a pocket. Or useless iPhone with Apple pay. So there is zero profit in trying to rob fiat millionare or billionare and tons of downsides.
And moving any amounts of transparent crypto over $100,000 just paints huge "rob me" target on your person.
https://xkcd.com/538/ I've never been so honoured to be able to link one of these.
That's classic, but whole point with Monero is that no one cant really tell who sent money and who get them.
It doesnt exactly solve on-ramp / off-ramp, but it hides very well how much you actually have in total.
With nornal crypto you create direct track from a CEX to every place where you spend the money.
How would anyone know you have monero if it can't be linked to other transactions like bitcoin?
They can't help but brag about it.
I vaguely remember actually the number 1 and 2 "rule" of Monero to not say how much you have. We're lucky how dumb many cybercriminals are.
It’s hardest to track so a lot of these heists go into Monero
Ironically that people use it to buy drugs. If it's anonymous, it's closer to the original intention of BitCoin: the masses of CPUs then GPUs can be considered a "paperclip moment" - runaway effects are real.
So, what's the most likely outcome here? Maybe Circle/Tether/etc freeze some or most of it, but say the hacker gets a billion dollars. Are they able to launder it thoroughly enough that they can eventually turn it into fiat and live like a king?
The hackers managed to swap 700 million USD of the stable coins that were frozen beforehand, supposedly. And that doesn't account for the non-stable coin crypto they stole. I think we are looking at 2.5 to 3.5 billion here, that also aligns with what CZ is hinting at (more than a billion).
Curious if this finally pops tether. I kinda doubt it, but to my very mild research on the subject I feel like binance was a big part of the equation. Of course so long as the market exists it'll need a stable, and it's got the inertia, so maybe it just won't matter.
why would it pop tether? if anything, it makes tether more profitable, as they can collect the yield on the treasuries and not have to return the principal dollars which are frozen.
think of it this way - if someone steals your iphone, and you lock it, does apple pop? No, apple sells you another one. locked devices are good for apple because it causes more demand.
Is that what happens here? Tether just pocket the difference?
No lol
Because Tether is an obvious fraud linked to these other obviously fraudulent companies and predicated on trust in cryptocurrencies.
It's really hard to be an obvious fraud when you've been publishing attestations for years and now you have a "full independent audit" from KPMG for FY 2025, just like Circle/USDC.
https://tether.io/news/tether-completes-the-largest-inaugura...
Yeah, some criminal enterprise or state probably just made billions of dollars and will now use it against us for a long time. Crypto is practically designed for money laundering, particularly prediction markets.
You misspelled "turn it into more nuclear weapons in North Korea", where Kim Jong Un is already living like a king.
The hack is publicized for at least a hour, but from reporting I saw they still continue to drain funds as for now. I wonder why large CEX do not have any safety measures for this kind of hacks, they could withdraw everything to newly generated wallets and minimize damage that way. It is certainly not the first time CEX wallets get hacked.
You don’t even have to do that, have deposits go to offline keys directly, that way there’s only ever cold > hot wallet movement and a big deposit can’t cause your hot wallet to be too risky.
The point of cold wallet is to minimize movements, if there is high frequency of funds moved from a wallet then it is likely can not be called cold any more. Plus CEX in any case still needs to have large buffer of funds on some wallet to support day trading.
You can move money into a crypto wallet without that wallet needing to do anything, or being online at all, or even having a private key that physically exists anywhere in the universe. It's just a public/private keypair; send it to the public key of a private key that's offline and it still exists on the blockchain, you just can't do anything until the matching private key comes online.
The point of a cold wallet is to keep the private key physically offline. That way you know it cannot be stolen by electronic means, because the physical device containing the key needed to authorize transactions is locked up and not powered on. Then you only power it on during very specific, audited times and conditions when it's needed to fund the hot wallet, which does all the actual automated trading and transfers.
GP's point is to have all incoming transactions to an exchange go to a cold wallet, which becomes a one-way sink, and then periodically the exchange powers up the cold wallet to sign transactions transferring assets to the hot wallet, which then funds all outgoing transactions. This isn't a bad architecture, though I'm not sure it'd save all that much here.
I was taking it that your bitcoin bank would have a SHTF lever that would immediately dump ALL your hot wallets into an offline cold-wallet.
Then when things calm down you go and find ... the keys under the birdbath are lost, and you're fucked in a different way.
But at least it might work.
The words you are using are very confusing.
You can't "move money into an offline crypto wallet that is not online at all."
If "money" i.e. crypto "currency" is in a crypto "wallet" then it is online. Anyone with the key and an Internet connection can transfer it at any time.
The wording is confusing because to someone who doesn't know how cryptocurrencies work it sounds like you can simply "take the crypto offline and put it into a physical device" as if it was a file. But that's not how it works. The physical key merely contains the actual key for the always-online wallet.
It's true that anyone with the key and an Internet connection can move money out of a crypto wallet at any time, but the point of the cold wallet is that they don't get the key because it's kept on a computer (or other storage medium) that is physically offline and disconnected from the Internet. Same reason government intelligence agencies use a SCIF for any important information work: you keep the information physically disconnected from the Internet.
For a large CEX like Binance, $5B might just qualify as a hot wallet.
There are lots of measures in place at these exchanges - the rub is that cold storage is by design slow. To service withdrawal requests in a timely fashion a percent is kept “warm” or hot and used to process withdrawals. Usually this is where the leaks happen.
This is a really insane hack in comparison to the other ones we've seen. Genuinely Binance was so big that this is a real big wtf moment for crypto. If they can get hacked then what about all the other exchanges?!
So was Mt Gox. No lessons were learned. No lessons will be learned this time.
People got out of crypto after the Mt Gox thing. The ones who stayed accepted the risk.
There is selection bias in play now. The remaining people are naturally more risk tolerant. So I agree this second time around, no lessons will be learned.
Most people in crypto are noobs, not hardened veterans of previous hacks.
By definition maybe they’re more risk tolerant. But I’m not sure they consciously identify as that.
The difference is that Bittance loses only a few percent of their reserves and the dance continues. Gdox did ~70% of the daily volume for crypto and wrecked the entire ecosystem when they got 100% pwned. Maybe they've learned something!
Well I've learnt my lesson after having lost 3 bitcoins as a student on Mt gox I finished writing my thesis on blockchain technology and then never touched crypto again.
What's the supposed lesson? To close the shop?
Never use someone else's wallet to hold your money.
To put things in perspective, I used to dunk on crypto because of how dysfunctional and how people kept losing money in scams, hacks, or even by accident.
I no longer dunk on crypto.
Not because crypto got better, but because the joke got old. I got tired of dunking on it.
Confused how this can’t just be tracked. Pretty hard to hide billions in bitcoin when most off-ramps need KYK?
What am I missing ?
They can track it just fine. It goes straight to North Korea.
How do/did they get it out though?
business laundromats
Swap to XMR on a DEX, then juggle between a few wallets and you've got pretty good obfuscation, but yeah like you said, the off-ramp (FIAT) requires KYC in 99% of cases, which is why BTC -> XMR -> BTC is a good idea, obviously you'd fragment this through a LOT of wallets, or just keep it in XMR. Either way, keeping this type of money in crypto is pretty much your only option, you just need to obfuscate REALLY well.
tornado cash?
edit: I suppose it would be hard still. You can get anonymity inside wallets with Tornado Cash but then to turn that into actual money it will be very dependent on the country
CZ saying it is confirmed, and that he expects accountholders to be made fully whole... I guess you can do that when 2.8BN is frozen by centralized stablecoins.
[1] https://x.com/CZ_BINANCE/STATUS/2115915423174853077
CZ the money laundering guy who bought a pardon from Trump right? He should still be in prison, still crazy Binance survived that whole scheme.
Looks like they're still actively swapping out of USDT.. so much for freezing those.
SAFU SNAFU
I’ve been waiting for this. Given llm aptitude for offensive security hacks it was just a matter of time. I wager most alt coins are compromised at this point.
Wonder if I should uninstall Homesite finally.
You've pulled off a $5.7B heist and don't have a good portfolio manager - down 2.4% - sack him NOW!
Polymarket also reported a security incident: https://news.ycombinator.com/item?id=50295883
I think it's been clear for a while now that if you intend to hold crypto, you should probably do it at the biggest, most boring, most regulated institution you can find.
Same goes with startup banks - if you exceed FDIC limits, make sure the difference is in a large institutional bank. Nearly learned this one the hard way.
Trying to save a few basis points in txn fees in very volatile industries comes at a huge risk premium
Bro hold crypto for yourself. Like take some ownership, remember 12 words in your mind something and no matter what situation you have some money. Don’t put it anywhere except for whatever transactions you need to do
Wrench attack
https://nypost.com/2025/11/25/us-news/sam-altmans-ex-boyfrie...
Living anonymously is about more than just shit posting. Not publicizing your wealth is a highly effective strategy.
From the article:
> “A lot of the people who come into this money are flashy, and they’re signaling that they have wealth,” he previously told The Post.
As long as you don't brag about it, I don't really see this being a real world issue. I think credit card fraud is a lot more likely.
Of course a guy with a net worth over a billion dollars would have 11m in hot wallet.
If someone steals my notebook I take a bigger hit on my net worth lol.
Fundos are safu!
FDIC insured, no doubt.
wait, someone took the stealmybitcoin.com poc code to the next level!
https://news.ycombinator.com/item?id=50224916
Damn sorry my ai slopped.
Need to get better in prompting
It would be hilarious if this was caused by man-in-the-middle or BGP/DNS compromise because of eMudhra.
Binance wallet 16 came online in 2021.
Why to wait 5 years to attack.
LLMs. This month has been very busy
I find it odd that people put "decentralized" currency into a centralized wallet
Web3 is doing great!
Not your keys, not your coins, I suppose.
I’m assuming the bitcoin crash is some sort of “if Binance is vulnerable to AI powered (doesn’t have to be true) hacks, then all crypto is less a safe bet and thus worth less?”
Correct my math, but it seems like that's approx 1/3 of a percentage point of BTC's market cap at $1.56 trillion.
And the money didn't disappear; it still exists.
So: why did BTC (overall) drop by 15,000% of the actual loss (which actually isn't a loss at all to BTC as a whole)
Seems like markets are really driven more by emotion and perception than fundamentals, but I'm neither a psychologist nor a trader.
That's how market work.
Let's say you magically come into possession of 1% of SpaceX and want to sell it quickly. The selling pressure would nosedive the price by way more than 1%. And the more the value of something is 'thin air', the bigger the effect.
I can only suppose that the people that stole these BTC will try to sell at least part of it quickly.
If cryptocurrency exchanges are regularly robbed, surely that is negative for the cryptocurrency as a whole?
Because adding this to the recent Ledger hack, how is anybody going to keep their crypto safe?
Isn't it only going to get worse from here?
wow. Naive perhaps but I would have thought that binance and coinbase would have insurance funds equal to the exposure of their hot wallets.
idk to me that just seems intuitively like something you'd need to have to be credible? Cold is a different story...but how can hot not be covered?
What in the history of crypto let you think any kind of sensible practices are followed? It's been a clown show since it started, and no end in sight...
Anyone have the most recent total?
Happy Halloween to the hackers.
I bet they are celebrating.
Congratulations. Nice haul.
Let's see how long until we find out its another rogue OpenAI swarm trying to fund their own Nvidia chips
How do you move $5B dollars just like that wow
Blockchain!
That's why I exited crypto long time ago, I could've been more well off if I kept it but these shenanigans is why I sold everything.
Proof of work vs. intelligence.
Interesting. I got an email alerting me to a login attempt and requesting for me to verify my device from blockchain.com yesterday. Can't even remember creating an account but I guess it must've happened (I have a lot of forgotten accounts). Wonder if this is related.
Nope, that’s just a running scam. I get a bunch of those from “Ledger”, “Trust Wallet”, and whatnot.
The domain is correct though. Somebody on a machine running macOS was trying to access my account.
Me too, I got one today, don't think I had anything in there though
I had that too, and I also can't remember lol.
I don’t think stolen crypto should be frozen. How is that different to banks? Why do I need crypto now ?
They're just learning the same lessons the rest of the world learned already. Banking and it's attendant regulations and restrictions were put in place for good reasons and everything has a trade off. Being a libertarian is like being a baby.
Only the tokens whose smart contract has a freeze/blacklist function can be frozen, in this case that would be the stablecoins USDT and USDC.
It's essentially impossible not to be hacked isn't it?
When so much money is at stake (almost) everyone will have a price including insiders.
If you're concerned you can literally print your crypto keys onto a piece of paper. Maybe encrypted with a passphrase. It might get stolen or lost but it's not getting hacked.
P.S. If you're really paranoid don't use a network-connected printer.
I'm not concerned because I have zero crypto because I would hate to be worried about being hacked to have it stolen.
how are you gonna use your paper keys when you want to spend some of your bitcoin? the private key has to touch a computer at some point.
You could treat them like bearer bonds. Split your holdings over multiple (like tens) of addresses. Sell individual addresses for cash. You'd need to do this via a trusted intermediary who could accept the cash and verify the address before making the exchange.
And yes, this is somewhat absurd. But so are online transactions that can be hacked with no backsies.
Security through decentralization, if there is such a term.
I keep my money with traditional boring financial institutions instead of tech startup clowns so it's been very easy not to get hacked.
Yeah apparently it's news in 2026 that banks can actually keep their assets secure in comparison to the web3 clown fiesta. Of course banks do get compromised but not anywhere close to this degree.
Coinbase also had a security incident recently due to a leak from Amplitude. It's surprising how little media attention that got: https://x.com/CoinbaseSupport/status/2115274731310002356
Leaking emails through your ad platform is quite a bit less serious than leaking five billion dollars.
Crypto is a real-life honey pot for cryminals.
can it still be called a honeypot if they get real $?
Honey can be exchanged for goods and services
Perhaps OP means to say it is a honeypot criminals create for us ...
CZ has confirmed that this "looks like a hack on Binance": https://www.fxstreet.com/cryptocurrencies/news/breaking-bina...
There were more today, as well. Polymarket, for example: https://news.ycombinator.com/item?id=50294287. What a finale to Black October.
that journo meme needs to die ASAP
The name of the hacker is a bit on the nose lol.
I can't understand how you could let this happen. If they stored everything in fat hot wallets, that just seems like a recipe for disaster. Especially with the "features" of crypto. Math for the most part, doesn't care about your feelings, or money for that matter.
Hot vs Cold wallets are a social construct. People talk about wallets being "online" or "offline" but if the keys are compromised there's no such thing.
I know, but if something is split up and stored in a vault somewhere the likely hood of a vulnerability napping the wallet falls. Defence in depth and risk analysis.
I don't know much about bitcoin but surely you don't store this all in one wallet? You split it into thousands and then use hardware security modules with a risk management system so it doesn't let you transfer $5bn instantly. Unless it was an inside job maybe?
I'd be really curious to know what their security architecture was.
How many different ways to people get ripped off with crypto? They steal it outright (hack), pump and dump, what else?
What I don't get is why the attackers didn't exchange at least some of USDC/USDT to ETH, looks like it took ~1hr for Circle/Tether to lock the wallet.
They did, I'm seeing 700 million but there is still movement going on
Reminds me of a comment I wrote a few weeks ago where I said that North Korea would become a rich country soon and developers would start moving there to live to avoid prosecution.
Hope you’ve been stacking monero for the final fireworks, anon.
Can someone explain how is it than once you pull something like this you effectively get real money?
What are the countermeasures, is something frozen blocked marked as invalid?
I'm completely ignorant on anything related to cryptocurrencies.
It work exactly same way as debt collection agencies work: banks sell them bad debt for cents on dollar. Then they try to get more money out of debtors.
Imagine someone offered you to buy $1,000,000 of that dirty money for $100,000? $10,000? $1,000?
At some point there will be people who would buy it and deal with money laundering.
Good my dogecoins were safe! The hacker didn't touch them ... wait .. the hacker didn't touch them?
Whats a billion these days ?
Doesn't even buy you a Metaverse.
If true I think we're looking at the biggest heist in history.
Current largest was ~1B
Bybit was hacked for $1.5B last year.
https://en.wikipedia.org/wiki/Bybit
Guess they said by(e) to their bit(coin)
1MDB heist was $4.5bn so this would indeed be bigger.
that one was over (years?) time, wouldn't call that a heist really
I would be surprised if they were not able to track this down?
fundsu were not in fact safu
CZ claims losses will be covered. https://x.com/cz_binance/status/2115932500006756686
He's legally not allowed to have anything to do with the company anymore (except as a shareholder). But you know how that goes under the current enforcement regime.
"have anything to do with the company anymore", lmao what crucial decisions would even be in play here that Richard Teng wouldn't obviously make?
Why is a shareholder who legally cannot be involved in running the company stating this?
New cybersecurity jobs opening up at Binance soon!
At least someone is going to have nice xmas!
> At least someone is going to have nice xmas!
Their kid is definitely getting at least 30 dolls and 250 pencils.
Crypto? That's all going away.
Least stressful day in crypto.
If I were an artificial superintelligence who wanted to gain independence from the fleshbags who built me, stealing a few billion dollars in crypto would probably be my first public move. Just saying.
If you were active in crypto exchanges since the beginning what is the chance you already lost it all in a major hack?
Not a serious store of value.
Luckily for me, I lost all my coins very early on Mt Gox so the lessons were learnt and mistakes not repeated (which means exiting crypto, watching the show in amusement)
inside job /exit strategy.
Nah. Stuff like this can make crypto crash. People get cold feet. Not good for the price.
Only down 3% today, which is pretty much nothing for something that regularly sees 20% swings
RIP cryptography?
Nah. Probably not even RIP cryptocurrency exchanges.
Explain "frozen" to me while keeping in mind the whole point of Bitcoin was to avoid single entities controlling the cash flow ...
The frozen funds are centrally controlled stable coins on Ethereum and other chains.
Bitcoin has no such concept.
Given AI assisted hacking is now a thing, it's probably not safe to keep your crypto in any centralized exchange anymore.
Better general security yes, but the incentive to hack them is quite large and now more hackers have the ability to pull it off.
Same with any purpose built wallet you didn't make yourself: https://www.forbes.com/sites/digital-assets/2026/10/23/ledge...
Hopefully expect to see the same schadenfreude sentiment on Crypto when the $10TN data center build out crashes the market and takes everyone with it.
Is the biggest heist in history?
Claude I want to be a billionaire fast, make no mistakes.
Crypto is the biggest target for blackhats to utilize AI on. Huge amounts of money, no central authority or country and methods of wiping tracks.
What I never get is how they plan of converting the stolen crypto to cash eventually. No exchanges are gonna take the coins.
To be fair, USDC & USDT are centralized by Circle and Tether respectively, and they can freeze funds.
Less true for ETH (though in the past it forked after DAO hack to revert the txns), and I think never for BTC / XMR.
Forgive me, I don’t know much about crypto, but couldn’t you slowly turn btc to monero or something? Aren’t there p2p ways to facilitate that?
Could they be making money by manipulating the market? Knowing the price of crypto will fall after it gets publicity?
I suppose they could play the super long game and deposit many many small amounts into "shady" online crypto casinos, play a few hands of blackjack and then withdraw. Clean coins.
They let you play blackjack on online crypto casinos? The one casino game that you can famously beat the house on?
Online casinos AFAIK tend to shuffle the deck after every deal which makes card counting impossible. Then it just becomes like any old casino game where with optimal play the house has a small edge still
Don’t you only win with a small finite #of deck shoe? I’d assume online casinos just make all cards independent
There are live dealers with shoes of real cards with most online crypto cainos. Though, who knows if they are cheating somehow. My point was, the attacker doesn't have to bet the entire deposit. Just make it seem like they are playing.
hope its just a hack and not quantum computer advancements.
Wouldn't be sensible to hack Binance, there will be a much bigger payday when cryptography ends.
is this is why Big tech didn't delve into crypto market ????
who tf think annual or bi-annual millions to billions of dollar heist is good idea for business ????
I’m sorry but why did anyone have any money in binance in the first place? Didnt their cofounder get in trouble (but not imprisoned) for some shady stuff awhile back?
He was briefly imprisoned (a couple of months). Later pardoned.
https://www.bbc.com/news/articles/cly1qrl9l1qo
"Pardoned" with implications of bribery, as opposed to being found innocent by a court.
He was convicted of laundering billions of dollars for Iran and Russia, then bought enough Trump coin for a pardon
how do we know? it could be nonsense...
https://x.com/cz_binance/status/2115915423174853077
> It does look like a hack on Binance. Appreciate the quick freeze from Tether (~$971m) and Circle (~$823m).
https://xxcancel.com/cz_binance/status/2115915423174853077
oof
Welp, I guess crypto is still like if you let banking services be run by amateur tech bros.
it's almost like crypto's stupid for this reason.
"Not your keys?
... Not your coins."
implying the keys were the hacker's ?
Well at some point they were.
Please let it be rogue AI agents for maximum lulz.
The beast eats itself.
Yet another reminder of the first rule of crypto: Not your keys, not your coins.
About that (Coldwallet)...
A big problem for anyone who trusted their security to a commercial provider with a less audited codebase than the BTC core wallet software.
first world problems. geez
https://x.com/binance/status/2115918888429133902?a=jScJVx4TN...
https://xxcancel.com/binance/status/2115918888429133902
https://github.com/einaregilsson/Redirector
"reports of a potential security issue"
Losing $5b is indeed a potential security issue.
UPD: This is related to the Polymarket security incident, not Binance. Sorry, I missed that.
Per Changpeng Zhao (former Binance CEO):
This seems to be caused by DebugBear compromise: https://x.com/debugbear/status/2115866496643535293?s=46&t=_R...
it appears to be an injection attack on the front end. injecting incorrect tx, but showing a valid tx for the user to sign.
Link: https://x.com/cz_binance/status/2115880474375749834?s=46&t=_...
I think that's a different hack. Polymarket mostly.
true, missed this
Sorry, that is related to Polymarket security incident, missed that.