The record breach of the “Binance” platform, which amounted to $6.3 billion, sparked urgent moves by US regulatory authorities to examine the extent of banks’ readiness to confront similar cyber attacks. The move comes weeks before new rules allowing banks to issue stablecoins take effect.
In this context, officials at the Federal Reserve Board and the Office of the Comptroller of the Currency, according to an analytical report published by Forbes, began communicating with American banks to inquire about security vulnerabilities, unusual activities, and any disturbances that occurred in services following the Binance hack. While one bank reported not experiencing any disruptions, the Federal Reserve and the Office of the Comptroller of the Currency declined to comment on these communications, which experts described as a precautionary review rather than a declaration of an emergency.
This regulatory interest reflects the increasing interconnection between the banking sector and the cryptocurrency market, as banks maintain stable currency reserves, process payments, and provide custody services, while some institutions rely on external trading platforms to manage their digital assets, which means that a major platform being hacked may transfer the risks directly to financial institutions.
The Binance report revealed that the attack did not depend on hacking the basic software code, but rather was carried out through social engineering and targeting employees. In September, someone posing as a recruiter convinced an engineer to download a malicious file onto his work machine. The attackers later used an internal AI tool to take control of the wallet engineers’ devices, before transferring funds from hot wallets to accounts under their control. The FBI accused hackers linked to North Korea of carrying out the attack.
In terms of security comparison, banks have a greater ability to freeze accounts and recover transfers compared to blockchain networks, whose transactions are difficult to reverse. However, legacy systems and banks’ reliance on employees and contractors make them vulnerable to phishing and login theft. This highlights previous incidents, such as the hacking of the Bangladesh Bank in 2016 and the theft of $81 million via the “SWIFT” system, and the French bank “Credit Motuel Arkia” losing about 100 million euros as a result of hacking a platform belonging to an external service provider.
Reviewing these controls is of great importance as the date of implementation of the “Genius” law approaches on January 18, 2027, which will allow American banks to issue stable currencies designated for payments. These currencies are not treated as bank deposits and are not covered by insurance, which poses new challenges related to protecting digital keys that allow the creation of new units or freezing currencies, as their seizure could give attackers direct control over the assets.
To confront these risks before January 18, experts recommended that one employee or device should not be allowed to approve large transfers, and that multiple parties should be approved by using separate devices. The proposed measures also include keeping keys inside physical security units, preventing the storage of permanent access codes, training employees to detect deep fakes, testing banks’ ability to freeze assets within minutes and confronting waves of mass recovery.
It is noteworthy that the companies “Tether” and “Circle” succeeded in freezing about $2.6 billion in “USDT” and “USDC” currencies within hours of the “Binance” hack, according to the blockchain analysis company “TRM Labs.” However, the attackers transferred part of the funds to the “Ether” currency, which there is no central party capable of freezing, which confirms the importance of rapid coordination between banks, trading platforms, and stable currency issuers when any hack occurs.
