Yes — one of the largest hacks in crypto history hit Binance, with losses initially reported at $2.5 billion and growing to $5.7 billion, driven by an exploit of Ethereum's EIP-7702; Tether and Circle froze $1.6 billion and CZ says user funds should be fully recovered.
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00:00 Welcome back. In case you're wondering what's going on in the crypto market, why everything is falling all of a sudden. Bitcoin is now around 78,000. A lot of alts are down 6, 7, 8%. It's because we're seeing and witnessing one of the largest hacks in crypto history right now. And unfortunately, it's still ongoing. So, uh, let me explain what's going on.
00:26 And hopefully you guys are off Binance at this point and not depositing any more money because well, let me explain. So, as you can see, Bitcoin is right under $79,000. We were doing pretty good and then all of a sudden went down. First of all, we had a couple earnings report that did not do well uh and it spooked the market, Amazon and Intel. But more importantly, uh, we're seeing one of the biggest hacks ever in history, which is why Bitcoin I to be quite frank, you know, down two down 3% for Bitcoin is actually
01:05 really good, but some of these you could see 6 7%. Um, I saw this about an hour ago. I don't know who Tree News is, but they said their AI flagged a possible theft from Binance hot wallets. At that point, no one knew if it was real or not, but there was suspicious activity. Okay. A lot of alts were being cleared out, moved from Binance's hot wallets and into some wallet and going through tornado cash.
01:35 And then later it was confirmed that yes, this is a hack. And CZ, of course, he's even though he says he's not part of Binance, everyone sees him as the Binance go-to guy. He tweeted out saying, "User funds are safe. It does look like a hack on Binance. Appreciate a quick freeze from Tether and Circle. That's 1.6 billion. I don't manage binance.com anymore, but as a shareholder, I expect all user funds to be fully recovered."
02:03 Well, it sounds like he is still in charge, right? With that kind of with that kind of wording. Uh at this point it was reported that it was a $2.5 billion hack. Okay. And most of that was frozen by Tether Circle. However, it's gotten worse. So CZ then tweeted loss might be a little higher than that, but we'll cover. So it just seems like it's getting worse and worse and worse.
02:37 And here's the thing, it's up to $5.7 billion. Okay, $5.7 billion. So, this is the largest in history. Now, can Binance cover it? Well, according to a lot of insiders like CZ and also people just looking at, you know, their asset, the proof of reserves, Binance is over 150 billion. Okay, but that doesn't mean they have $150 billion worth of assets. That means that they just hold that much from the users and institutions and stuff.
03:13 There's no way that they have $150 billion. If they could lose 150 billion, they could cover 150 billion. No. So, who knows how much they have in their safe, you know, that's what CZ always talks about, safu or safe. Uh I don't know how much they have in their reserve, but it is still going on. Basically, it looks like every single thing that is being deposited, well, that's not what this says, but there's another tweet that shows that every single thing that is being deposited into Binance right now is being withdrawn
03:47 into the hacker's wallets. So, there's something going on with their hot wallet. So, if you are a Binance user, do not do not deposit into Binance right now. And quite honestly, you should probably withdraw. I don't know if they froze withdrawals. They probably should at this point. Um, but yeah, that's what's going on. So, this is why you got to be careful.
04:09 Okay. I mean, we hear about it all the time, right? Like, big guy just got hacked, you know, like a month ago and some other exchanges closed down. I mean, you see this all the time, but this is unprecedented. $5.6 billion. And the hacker is not just trying to cash it out, okay? He's doing a lot of stuff because when you steal this much, you got to try to hide it.
04:36 And uh he's just moving. You could see move to unis swap. Pepe is being sold ra uh wrapped bitcoin or w bitcoin e or whatever. And then you got uh Ripple's stable coin all being moved some through tornado cash some not and it's just going ongoing. Now this is the thing it seems like okay this is what started it uh there's a exploit on Ethereum's EIP7702 and this is what led to this.
05:11 However, since this now Bitcoin is also being stolen. So, they're losing Bitcoin, ETH, alts, pretty much everything at this point. Okay. And the hackers are also using the hack funds to borrow on A. So, A has now frozen lending markets, right? Because again, uh this is just screwing things up, okay? uh in a big way. So the hackers are trying to do what they can.
05:47 It's very sophisticated. Obviously, it takes a lot of manpower and effort. So, it's going to be maybe some hacking group, some large hacking group or North Korea. I don't know who's going to claim for this, but or take credit for this, but it is happening. So, that's why I've said at the beginning, I'm actually surprised Bitcoin is actually holding pretty well and the alts are holding well.
06:09 It could be because all this, you know, all the funds that are taken can't be sold, right? If they were sold, I think it would be a lot worse and lead to much bigger liquidations. So, that is what's happening. Okay. And uh just some irony. CZ tweeted this out a week ago. No crypto wallet is 100% safe. No software is bug free. No tech is 100% secure.
06:38 There are risks in everything you do. There are risks. If you don't do anything, there will all be issues, setbacks, and problems. Stay up to date. Manage risk, solve problems. Prehack a Binance tweet. Uh, he was trolling, but you know, turns out that was true. It's true, too. You know, you're damned if you, damn you don't. We're hearing about hardware wallets, you know, having problems.
07:00 Now, of course, exchanges are having problems. It's just a It's just a scary time. Like, what do you do? Who do you trust, right? I don't really have This is why you got to trust who you park your crypto with, right? Binance, hopefully, they have the money. It seems like they do. They make billions upon billions every quarter. So their their security fund or uh failsafe fund or you know recovery fund whatever you call it probably in the tens of billions.
07:35 So they should be able to cover this unless they can't stop it unless it seems like this is a protocol level bug. So if it is and this is like all of Ethereum they need to shut down Ethereum. They need to shut down Ethereum, Arbitum, all the layer twos, everything or it's going to keep going, right? So, uh I don't know. This is still developing. I just want to let you guys know, stay safe.
07:58 Get off of Binance right now. If you're on other exchanges, you may want to think about it, too. I I don't think every exchange is is in trouble right now. Um but yeah, just be safe, right? And like I said, self-custody also has its risk. So you hear about it being, you know, having problem mostly from like third-party email vendors. That's how they like do fishing attacks and stuff and people fall for it.
08:25 So, normally speaking, hardware wallets are secure, more secure, but you got to safeguard that that recovery phrase because if you somehow lose it or you have a bad device, we heard about it with Cryptobillies selling ledgers and people getting drained because people put in like a like a you know fake chip in there. So, you got to be careful where you're buying it from.
08:47 You got to secure your recovery phrase and you don't want to connect it to any malicious site that could just steal your crypto, right? If you do those three things, then you should be good. And then keep of course your cold wallet, hardware off the network, so forth, right? Uh that is still the safest, but of course there's still risk. So like CZ is saying, nothing is 100%.
09:10 But with exchanges, if you go park your money there, park it in the bigger exchanges, the ones that do have reserves that do have some kind of security blanket so that if this happens, you're recovered, right? So, that is it. Let's see how the rest of the day develops and uh and stay strong, my friends. Okay. Unfortunately, that's two years in a row.
09:35 Yeah. Just the irony. Someone asked the other week, you know, is Binance going to screw it up this October? And I laughed it off and I'm like, you know, don't ask that because of course last year was 1010 was the big liquidation event. And it just so happens, not 1010 right now, but still October and it just so happens Binance is somehow again involved. The irony of it. All right, have a good one, guys. Take care. Bye-bye.