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- Binance CEO Changpeng Zhao has shared a story of how the exchange froze an account containing funds stolen from executives of a Binance client.
- Out of the total amount of $12.5 million stolen, $11.8 million was frozen by the exchange.
Binance CEO Changpeng Zhao (CZ) has disclosed that some accounts suspected to contain stolen funds have been frozen by the crypto exchange. According to the story shared by CZ on the social media platform X, executives of a Binance client were on a trip to Montenegro. Unfortunately, they were abducted and their crypto wallets were forcefully emptied.
In total, $12.5 million was stolen from the executives according to CZ. Binance received the complaint and started an investigation into the on-chain activities of the crypto transactions. Binance traced the wallet that received the stolen funds and reached out to its partners to freeze the account. The brief investigation led to the discovery that all the funds were transferred in USDT to a Tron wallet. About 94.4 percent of the total amount stolen, which is $11.8 million out of the $12.5 million was frozen according to the Binance CEO.
The quick recovery measures to this incident raised a question of how crypto is better than fiat as the former can be frozen in a wallet. In response, CZ explained that privacy coins like Monero (XMR) cannot be traced. Bitcoin can be traced, but cannot be frozen unless sent to a centralized exchange.
It’s a balance, and there is no perfect balance point. If you use XMR, then there isn’t much anyone can do (or to help you with), as far as I know. Bitcoin can be traced, but not frozen, until you send it to a CEX [centralized exchange]. The key point is, you have the choice.
Binance Discloses Response to Stolen Funds
This action puts the exchange in a good position with customer support highlighting its standard procedure for stolen funds sent to Binance funds on X. According to them, the exchange mostly freezes the funds temporarily depending on the nature of the information while the complainant provides a police report within 7 days after contacting the exchange.
Depending on the information provided, Binance may grant a temporary courtesy freeze of any allegedly stolen assets … To keep the stolen assets frozen, you must provide a police report within 7 days after contacting Binance Support. Binance may extend the freeze period for you if you need more time to obtain a police report (on a case-by-case basis).
Recently, Binance announced it has launched a new Web3 wallet to improve self-custody and strengthen security. It also contains multi-party computation (MPC) tech that enables users to save their assets without worrying about seed phrases. CZ is known to have questioned self-custody wallets in the past. According to him, the new wallet would address the issue of simplifying the management of Web3 tools.
To help drive Web3 adoption, we have to identify and plug the gaps between centralized and decentralized systems. Binance’s Web3 Wallet lowers the barriers of entry for users to achieve full self-custody of their assets and it is an important, convenient bridge towards defi empowerment.
