Binance CEO Changpeng Zhao revealed on Friday evening (10) that executives from a Binance partner company in Montenegro have been kidnapped. As a result, the businessmen had stolen more than $12 million worth of cryptocurrencies.
According to CZ, Binance managed to freeze the funds and recover $11.8 million of the stolen $12.5 million, a remarkable achievement considering the seriousness of the case. The money, all in USDT, had been transferred to a Tron wallet.
“Client executives were lured on a ‘business trip’ to Montenegro, where they were kidnapped and forced to empty their wallets. Total loss of approximately $12.5 million.
We investigated the network activities and contacted our partners earlier today to freeze the wallet as all funds were being withdrawn in USDT and transferred to a Tron wallet. Of the $12.5 million stolen, we were able to freeze approximately $11.8 million.” – said CZ in a message on X (Tweeting).
Executives of a client were lured on a ‘business trip’ to Montenegro, where they were kidnapped and forced to empty their wallets. Total loss ~$12.5 million.
We investigated on-chain activities and contacted our partners earlier today to request a wallet freeze as all…
— CZ 🔶 Binance (@cz_binance) November 10, 2023
Implications and consequences
However, the revelation raised several questions in the cryptocurrency community, with users wondering how Binance froze the funds.
“I condemn this loss and am happy that most of the money is safe, but I have doubts. How much better are cryptocurrencies if someone can still freeze our personal wallets?”one user asked.
CZ responded by highlighting the difficulty of finding an ideal balance in a system designed to be decentralized and largely immune to intervention.
The challenge of dealing with theft in an ecosystem where “freezing” assets is not a default option is being questioned.
Binance’s CEO discussed the issue of using privacy cryptocurrencies like Monero (XMR), which, while they can prevent freezes, make it impossible to recover funds.
He emphasized that while Bitcoin can be tracked, it cannot be frozen unless it is on a centralized exchange like Binance.
It is an equilibrium, and there is no perfect equilibrium point.
If you’re using XMR, there’s not much anyone can do (or help you with) that I know of. Bitcoin can be traced, but not frozen, until you send it to a CEX. 🤷♂️
— CZ 🔶 Binance (@cz_binance) November 10, 2023
Recovering stolen funds and compensating affected users are measures that can have significant financial consequences. Furthermore, market confidence may be damaged, which could impact trading volume and token prices.
In turn, users may start to have doubts about using the platform for cryptocurrency trading.
The withdrawal therefore serves as a reminder of the unpredictable cryptocurrency environment. As platforms like Binance continue to innovate and improve their security measures, the community remains vigilant about what exchanges can do, such as freezing funds at any time.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
