Binance, one of the world’s largest cryptocurrency exchanges, recently faced a $6.3 billion security breach. The incident sparked new debate over whether digital asset platforms are more vulnerable to attacks than traditional banks, or whether their openness simply exposes attacks that remain hidden in conventional finance.
Binance breach exposes differences in crypto and banking security
Attackers exploited wallet permissions and operational controls to siphon funds, rather than exploiting flaws in Ethereum’s core cryptography. Once inside, the hackers transferred approximately $2.5 billion from a single Binance wallet in less than four minutes, using Ethereum’s EIP-7702 feature. This capability allows smart contracts to operate ordinary wallets, increasing both flexibility and potential risk.
Mini dictionary: EIP-7702, or Ethereum Improvement Proposal 7702, allows a wallet address to temporarily act as a smart contract during a single transaction. This introduces programmable features but also increases complexity and, potentially, risk in wallet operations.
Confirmed blockchain transactions are typically irreversible, meaning that once the attacker authorized the transfers, the assets were immediately moved beyond Binance’s internal controls. This differs from traditional banking, where some fraudulent transfers may be recalled or blocked after the fact.
Richard Teng, Binance co-CEO, said that investigators discovered multiple security gaps, including tactics designed to erase the trail of stolen funds. Binance is now rebuilding its withdrawal systems and re-examining how key access, signing procedures, and employee devices are managed to prevent similar exploits.
Tomer Sharoni, CEO of Addressable, an Israeli blockchain intelligence firm, emphasized the risk imposed by crypto’s design: “A bank employee’s laptop can be compromised exactly the same way as an exchange employee’s laptop. The phishing email, the malicious download, and the fake job interview are all the same. The difference is what the attacker gets at the end.”
Speed, finality and irreversibility make large crypto treasuries the most valuable targets in finance, Sharoni said, describing why exchanges appeal to cybercriminals.
Crypto vs banks: Visibility and response to attacks
A 2024 International Monetary Fund report found that banks remain the most frequent targets of cyberattacks within finance, accounting for nearly 20% of all reported incidents and almost $12 billion in direct losses between 2004 and 2023. However, these figures only reflect reported cases and cannot confirm whether banks or crypto exchanges face more frequent breaches.
| Sector | Reported Losses (2004-2023) | Typical Disclosure |
|---|---|---|
| Banks | $12 billion | Often private, sometimes delayed |
| Crypto exchanges | $6.3 billion (Binance hack alone) | Usually public, immediate on-chain trace |
Abdul Rafay Gadit, co-founder of ZIG Finance, countered the characterization of crypto’s unique vulnerability. Gadit believes that crypto exchanges are not hacked more frequently, but they cannot conceal attacks due to blockchain transparency. “Crypto doesn’t get hacked more than banks. It just can’t hide it, and it can’t undo it. Banks get breached constantly, but most incidents are handled quietly and surface later, if at all. A crypto hack shows up on a block explorer within minutes, so it feels more frequent.”
“So, no, crypto isn’t more vulnerable; it’s just less forgiving,” Gadit argued, stressing that the public nature of blockchain transactions amplifies the perception of frequent crypto thefts.
Gadit added that banks may investigate breaches internally and inform affected customers privately, while crypto incidents play out in public, with the stolen funds viewable in real time on blockchains. He also noted that not every bank breach results in stolen funds, as some incidents involve compromised personal data without loss of deposits.
Calls for operational reform after Binance hack
Both experts agreed that exchanges must implement robust operational safeguards. Gadit pointed to measures such as segregated signing authorities, detailed approval processes, and tighter withdrawal restrictions, mirroring established bank procedures.
Daniel Tunkel, head of financial regulation at Edwin Coe in London, described crypto exchanges as “an accident waiting to happen,” warning that exchanges must not only prevent breaches but demonstrate enough resources and controls to withstand a major incident.
The CertiK blockchain security firm reported $1.28 billion in crypto losses during the third quarter of 2026, a nearly 56% increase from the previous quarter. Earlier in 2025, Bybit lost $1.5 billion in another major attack, underscoring the ongoing threat.
Sharoni explained that blockchain transparency makes it possible to track stolen funds across the network, but tracing a theft is not the same as preventing it in the first place. The challenge, he said, lies in closing the gap between detection and active intervention.
