Binance Pauses Withdrawals for Ankr Tokens Following Hack

  • Binance said it did not suffer a personal loss from the hack.
  • The hack on Ankr took place early Friday and the hacker used the aBNBc token’s smart contract to generate an infinite number of this token.
  • The aBNBc token represents the staked version of the BNB token from Binance, which is used to earn rewards on Ankr.
  • According to Chainalysis, hackers have stolen over $3 billion total from crypto companies in 2022 alone, making the year a lucrative one for fraudsters.

Changpeng Zhao, CEO and founder of crypto exchange Binance, notified users of possible hacks on two crypto projects and announced that the exchange had paused withdrawals of Ankr tokens as a security measure. Zhao wrote on Twitter that there were “Possible hacks on Ankr and Hay,” adding that the “initial analysis is developer’s private key was hacked, and the hacker updated the smart contract to a more malicious one.”

Binance also froze $3 million that hackers had moved to Binance’s centralized exchange. Crypto users are yet to recover from the FTX scare, and CZ’s tweets awakened old fears. However, Binance, in a separate tweet, dismissed such fears, revealing that the hack was not against the exchange. Binance also stated that a team was investigating the situation.

Ankr, a distributed node operator for proof-of-stake networks, enables users to stake their tokens effortlessly and without having to purchase the required hardware. According to reports, the hacker used the aBNBc token’s smart contract to generate an infinite number of this token. So far, the exact number of tokens generated has not been ascertained, but sources claim as much as 60 trillion aBNBc tokens were minted.

The hackers quickly moved these tokens from Binance to Ethereum after swapping some of them for USDC. The Ankr team said it lost almost $5 million in BNB as a result of the hack. The team also disclosed a plan to compensate impacted customers by reissuing a new token called ankrBNB, which would be issued to aBNBc holders before the hack. In addition, Ankr would purchase $5 million worth of BNB tokens as payment to liquidity providers.

Lawrence Woriji Verified

Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.

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