ON Thursday, the largest cryptocurrency heist in history saw some $6.3bn drained from exchange platform Binance’s own wallets. Most of the funds were moved out in about 20 minutes. The hack dwarfed the previous record, of some $1.5bn from rival exchange Bybit in February 2025. Binance’s own investigation initially suggested that the laptop of one of its engineers had been compromised, which allowed attackers to gain access to an internal service used to submit withdrawals. It later emerged that this had been a sophisticated attack involving multiple breach points in Binance’s systems, malicious software that covered its tracks as it operated, and abuse of a feature of the Ethereum network to bypass the exchange’s normal approval controls. Blockchain analytics firms have attributed the attack to TraderTraitor, a North Korean state-backed hacking group. Binance, the largest crypto exchange in the world, has suspended withdrawals as it reviews security.

Though Binance has said it will cover all user losses, news of this incident has shaken the crypto sphere. It also raises serious questions — about custody standards, licensing conditions for exchanges, and who bears the losses when things go wrong — for countries in the process of embracing cryptocurrency, including Pakistan. The fact is that Binance is considerably more experienced in the crypto trade than most new entrants and regulators. If its security and operational controls can be compromised, then potentially anyone can be at risk. Until early last year, Pakistan treated crypto as a regulatory no-go area. The authorities have since reversed gear. Binance co-founder Changpeng Zhao has served as a strategic adviser to the Pakistan Crypto Council since April 2025, and in December 2025 the finance ministry signed an MoU with Binance to explore tokenising up to $2bn in sovereign assets. The exchange’s troubles are therefore of direct concern to Islamabad. But though embracing technology is understandable and perhaps also commendable, policymakers must ensure that the risks that come with dealing in crypto are also being actively assessed and addressed. This incident is a timely reminder that the cost of a security failure can be immense. The authorities need to understand what they are getting into, and make provisions to mitigate risk.

Published in Dawn, November 1st, 2026