After $6.3 billion hack, custody becomes the center of dispute in crypto infrastructure
Binance has already replaced 98% of the affected assets, and the episode reignites the debate about who keeps digital money and how companies protect themselves.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM CNBC MARKETS · 2 MIN
A US$6.3 billion hacker attack has placed the custody of crypto assets at the center of the sector's discussion. According to CNBC Markets, the case involved US$6.34 billion in affected assets and occurred on the Thursday before the report was published. On Tuesday, Binance CEO Richard Teng told the same broadcaster that 98% of this amount had already been replaced.
The market reaction came on different fronts. According to CNBC Markets, Tether, Circle, Ripple and other companies have frozen or restricted around $3 billion in stolen assets. Coinbase blocked transfers to compromised wallets and offered direct help to Binance. Meanwhile, the broker continues to buy outstanding assets, which are less liquid.
The episode has an important difference in relation to the collapse of FTX, at the end of 2022. According to CNBC Markets, there was no leadership fraud. Still, the case shows that an invasion can affect client assets on a billion-dollar scale, and the discussion stops being just who runs the company and becomes where and how the assets are stored.
For senior analyst Owen Lau, from ClearStreet, the company's size weighs on its defense. Larger companies have more resources to invest in cybersecurity, while smaller companies face more difficulty in keeping up with this level of protection. Lau assesses that sector consolidation could grow, with companies purchasing custody and infrastructure capabilities.
The institutional custody market already has established names. Coinbase has been operating this business since 2018, and BitGo, founded in 2013, is among the pioneers. Circle entered custody this year, following approval from the OCC to act as a trust bank. Ripple and Kraken have launched similar operations in recent years, and small-cap-rated Gemini Space Station has offered custody since 2019.
What changes for the investor
For those who invest and operate in digital assets, the case puts custody on the same level of analysis as liquidity and price. It is worth observing which companies have their own security structure, how the larger ones can increase their participation if consolidation advances and how the speed of replenishing funds affects customer confidence. The report does not allow predicting price behavior, and reading depends on monitoring the next steps of the broker and competitors.
Automatically translated from Portuguese.
