When he was serving jail time in 2024, the crypto exchange billionaire Changpeng Zhao wrote a book with a modest title: Freedom of Money: A Memoir of Protecting Users, Resilience, and the Founding of Binance.
asserted
billionaire → serve → Binance
A $US50 million ($71.2 million) personal fine, $US4.3 billion company penalty and four-month stretch in prison for failing to run an effective anti-money laundering scheme were like water off a duck’s back.
asserted
fine → fail → back
In one irony-free observation, Zhao wrote of being in jail that “the entire process was designed to deliver the lowest possible customer satisfaction.”
asserted
process → write → satisfaction
The book did little too to explain how Binance, the world’s largest crypto exchange, has protected its users, except where that is a byproduct of its own rapid growth. Since last Friday, when hackers stole $US6.3 billion in tokens from his website, Zhao has had a chance to turn his words into reality.
asserted
Zhao → explain → reality
If Binance’s announcements since the hack are to be believed, the former chief executive has done a good job of compensating, if not protecting, his users.
asserted
executive → believe → users
After a feverish weekend of work, Binance announced on Monday that it had covered 95 per cent of the stolen tokens by value through its unfortunately named SAFU – Security Asset Fund for Users – program and resumed withdrawals.
asserted
it → announce → withdrawals
That may turn out to be the easy part.
uncertain
That → turn → ?
If Binance is to actually get back the billions in tokens that were stolen, Zhao will have to hope that other cryptocurrency companies have better anti-money laundering processes than his firm once did.
asserted
firm → get → processes
According to the FBI, the heist was likely carried out by a North Korean hacking group known as TraderTraitor.
uncertain
heist → accord → TraderTraitor
Early indications suggest that once the hackers started moving tokens, the entire $US6.3 billion was pulled out within half an hour.
asserted
billion → suggest → hour
At that point, much of the haul was in stablecoins such as Tether and Circle, which are designed to track the price of another asset, such as the US dollar.
asserted
which → design → dollar
But the hackers rapidly started exchanging those tokens for truly decentralised alternatives, such as Bitcoin and Ethereum.
asserted
hackers → start → Bitcoin
The difference is that Tether and Circle can be frozen by the tech companies that created them; Bitcoin and Ethereum are the wild west.
asserted
Bitcoin → freeze → them
The cryptocurrency tracking company Chainalysis noted that about half of the stolen coins were frozen by law enforcement and industry players before that could happen.
uncertain
that → track → enforcement
That has put all eyes on the remaining $US3.3 billion worth of coins, which are now pinging between different cryptocurrency platforms, wallets and coins as the hackers try to avoid the watching eyes of law enforcement and crypto analysis companies.
asserted
hackers → put → enforcement
Convert the money into traditional currency, such as US dollars or Chinese yuan, that the North Korean regime can actually use.
asserted
regime → convert → that
Where a traditional hack – and North Korea has executed several, including the Wannacry breach that hit the UK’s National Health Service or the 2014 Sony Pictures attack – might result in the release of sensitive data, mass disruption or a ransom payment in the millions, targeting a big crypto exchange can net billions.
uncertain
targeting → execute → billions
In his book, Zhao frames his jail time as a disproportionate punishment for a minor record keeping issue.
asserted
Zhao → frame → issue
The US government disagreed, arguing in court that Binance had failed to stop hundreds of millions of dollars in unlawful transactions, including for sanctioned Iranian entities and drug traffickers.
asserted
Binance → disagree → entities
Zhao has since been pardoned by US President Donald Trump.
asserted
Zhao → pardon → Trump
He may have moved on, but to stop Binance users’ stolen funds being swapped for traditional money, Zhao needs other cryptocurrency exchanges to do much better at detecting malicious users than Binance did – at least in the past.
uncertain
Binance → move → past
The Aporia
