Nick Ducoff

My thoughts on the Binance hack: This is what I’d call a sophisticated unsophisticated attack. This has been attributed to Lazarus, a nation-state adversary. That doesn’t make them unstoppable. Nothing about what appears to have happened here is new. It’s the same playbook we’ve seen many times, and many of these attacks could have been stopped with simple controls. Companies have the ability to stop this. Enough is enough. Companies over-index on protecting the keys and don’t invest nearly enough in the signing infrastructure and flows around them. We saw it with Bybit, where signers were tricked into approving a different transaction than the one they thought they were signing. That was 100% preventable, with controls that are relatively easy to implement. By Binance’s own account, a DevOps engineer’s laptop was compromised, and that gave the attacker access to a service container that could submit withdrawal transactions. My read is that the container was trusted internally, so anything coming from it was considered safe to sign. That’s where additional controls belong. Verify that what’s being signed is what you meant to sign. Did we intend to sign a 7702 delegation? No? Then don’t sign it, and open an incident, because you’ve been compromised. That’s one control that should have been in place. We don’t know yet how a compromised laptop reached that container, but I’d expect other controls were missing there too. Also the messaging of ‘Your funds are safe’ creates a false sense of security. There may come a day when an exchange can’t say that. If digital assets are the future of financial markets, the industry needs to get its house in order.”