Monday, May 20, 2024

Changpeng Zhao, CEO of Binance, recently disclosed an incident involving the abduction of executives from a Binance client company. These executives were coerced into depleting their cryptocurrency wallets. Zhao elaborated on Binance’s swift action in tracing the transactions and successfully freezing over 94% of the illicitly obtained assets.

Binance CEO Changpeng Zhao Narrates Freezing of Illicit Funds

In a narrative unfolding on social media platform X last Friday, Binance’s CEO, Changpeng Zhao (CZ), recounted the exchange’s effective response to a real-life crypto theft. He described a harrowing incident where executives of a Binance client were kidnapped during a business excursion in Montenegro. Compelled to transfer their cryptocurrency holdings, the victims incurred a substantial loss of approximately $12.5 million.

Zhao explained that Binance promptly initiated an investigation into the on-chain movements of the stolen cryptocurrencies, collaborating with various partners to immobilize the wallet containing the pilfered funds. He disclosed that the stolen amount, exclusively in tether (USDT), was shifted to a Tron wallet. CZ proudly announced that Binance was able to freeze around $11.8 million, equating to 94.4% of the total stolen amount of $12.5 million.

In a subsequent discussion on X, when questioned about the comparative security of cryptocurrencies against traditional fiat in banks, particularly regarding the ability to freeze crypto wallets, CZ remarked, “It’s a balancing act with no ideal equilibrium. With XMR, intervention is limited, but with Bitcoin, although traceable, it cannot be frozen until it reaches a centralized exchange (CEX).” He emphasized the essential aspect of having a choice in these matters.

Binance Customer Support also took to platform X on Saturday to outline the exchange’s established protocol for handling stolen funds sent to Binance. “In response to valid claims, Binance may provisionally immobilize the alleged stolen assets. Continuation of the freeze mandates a police report submission within a 7-day timeframe post initial contact with Binance Support. Extensions for obtaining the police report are considered on an individual basis,” they stated.

Last week, Binance introduced a Web3 wallet, aiming to simplify the process of self-custody in the cryptocurrency realm. The exchange described this new Web3 wallet as an integrated feature within the Binance app, designed for self-custody of digital assets. “The wallet’s security model splits a user’s private keys into three separate components, known as key-shares. Two of these are kept by the user, aligning with the self-custodial nature of the Web3 Wallet,” Binance explained.

We invite your thoughts and opinions on this incident shared by Binance’s CEO, Changpeng Zhao, in the comments section below.

Frequently Asked Questions (FAQs) about Binance Kidnapping Incident

What Happened to the Executives of a Binance Client Company?

Executives of a Binance client company were abducted and coerced into emptying their cryptocurrency wallets, resulting in a loss of about $12.5 million.

How Did Binance Respond to the Theft?

Binance responded by tracing the on-chain activities of the stolen funds and collaborating with partners to freeze the stolen assets, successfully securing approximately 94% of the stolen amount.

What Was the Total Amount Stolen and Recovered?

The total amount stolen was $12.5 million, and Binance managed to freeze about $11.8 million of this, which is roughly 94.4% of the total stolen funds.

Did Changpeng Zhao Comment on the Security of Cryptocurrencies?

Yes, Changpeng Zhao commented on the balance between the security of cryptocurrencies and traditional fiat currencies, noting the traceability and freezing capabilities of various cryptocurrencies.

What New Security Feature Did Binance Introduce?

Binance introduced a new Web3 wallet, designed for self-custody with enhanced security features. It utilizes a unique system where a user’s private keys are split into key-shares, with two out of three controlled by the user.

More about Binance Kidnapping Incident

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