Binance Exec: Without Validators’ Action, BNB Smart Chain Hack Could Have Been Worse

Patrick Hillmann, the chief communications officer of the crypto exchange Binance, stated that validators on crypto platforms are becoming smarter.

Patrick Hillmann, Binance CCO. Image: Prweek

BNB Chain, a blockchain intimately associated with Binance, was the latest victim of a breach that emptied the ecosystem of $100 million in cryptocurrency over the weekend. However, the offence could have been worse.

“The elephant in the room here is as these attacks become more sophisticated … If they were more organised, [the hackers] probably could have gotten more funds off of the ecosystem than they did,” Hillman stated. While the hackers could steal around $100 million, the maximum amount they could have taken was $570 million.

“What we are seeing here is that as we see more of these attacks on bridges, the communities that rally around these blockchains are getting much better at shutting them down quickly, updating their systems and preventing a worst-case scenario from happening,” Hillmann explained.

According to Hillmann, BNB validators saw suspicious behaviour on Thursday at BSC Token Hub, one of the platform’s bridges. They concluded that the bridge was being used to mint more BNB tokens. He compared the act to a bunch of burglars entering the U.S. Federal Reserve, creating their currency, and then fleeing.

Nearly 90 minutes after the initial hack, Binance CEO Changpeng Zhao expressed alarm, predicting that the bridge had been abused to $100 million.

“Luckily that community, the validators, sprung into action quickly, were able to lock down the chain and prevent the lion’s share of that new minted BNB from being able to leave the ecosystem,” Hillman said.

The attack caused 26 of BNB Chain’s validators to take action, preventing a $570 million hack, or the value of the 2 million illegally produced BNB tokens, from occurring.

Regarding if centralisation on the BNB Smart Chain is a cause for worry, Hillmann stated that a smaller community overseeing and locking the doors at night had advantages.

“Because those 26 validators can work with one another so quickly, they can prevent that worst-case scenario from happening,” he said.

The validators of BNB Chain have said that they will hold a series of on-chain governance votes to spot if the hacked funds should be frozen and whether a bug bounty payment scheme should be implemented to prevent future attacks.

Hillmann stated that to guarantee the BNB token is growing at a sustainable rate and because the hackers did not take anyone’s money, the BNB community plans to burn $2 million worth of BNB tokens this year to bring it back to parity.

Hillman said that the BNB Chain community is collaborating with law enforcement to track down the hackers, whom he speculated may be “either a state-based actor or a threat group that is tied to a state actor.”

Hillmann stated, “In some ways, this was a very sophisticated attack, and in some ways, it was not.”