Dogecoin

A few more updates on the Binance mess. Quite a bit has happened, but alas I was dreaming of cannoli. - First, blockchain intelligence firm TRM Labs now attributes the attack to North Korea’s TraderTraitor hacking group with high confidence. Elliptic has reached a similar conclusion, and both Reuters and AP have reported the findings. TRM estimates that approximately $6.36 billion was moved out of Binance wallets across TEN blockchains, most of it in about 20 minutes. - Some particularly interesting technical details have also emerged. According to TRM, on Ethereum the attacker used 50 pre-signed EIP-7702 authorizations, one of which allowed the attacker’s code to take over the execution of a major Binance hot wallet and repeatedly drain it. On the other affected blockchains, the attacker used ordinary transactions with VALID signatures. This strongly suggests that the attacker gained access to the infrastructure responsible for authorizing transactions across multiple blockchains. How they obtained those authorizations remains the big question. And speaking of that, Binance has now acknowledged that its initial explanation involving a compromised DevOps engineer’s laptop was incomplete. Its investigation has uncovered additional points of breach. Co-CEO Richard Teng also made sure to clarify that this was not something that could have been accomplished using a single engineer’s permissions in one action (phew). Binance maintains that it has found no evidence of private keys being leaked. But that still leaves one wondering how the attacker could obtain authorization to move billions of dollars across so many different wallets and blockchains. We will need to see the promised technical postmortem before drawing conclusions. - Now, about the money. Binance says approximately $3 BILLION of the affected assets has been frozen, with the assistance of stablecoin issuers and other organizations. This is certainly encouraging. But please remember that frozen funds are NOT necessarily recovered funds, and neither should be confused with losses already covered. A considerable amount of BTC and ETH remains beyond the reach of issuer-level freezing mechanisms. More importantly for users, Binance has now announced that it has allocated over $6.34 BILLION in company funds to replace the affected assets. According to the exchange, $5 billion is already held in the same cryptocurrencies that were affected, and it is purchasing the remaining approximately $1.34 billion through market and OTC transactions. These figures are separate from the approximately $3 billion reportedly frozen. But these are still Binance’s own statements, do not trust anything blindly at this moment. We need, among other things, independent verification that the reserves have actually been restored, and a proper accounting of the losses and assessment of the company’s finances. Binance has promised an updated Proof of Reserves. - Finally, the current situation for users. Binance says deposits (…) are operating normally, while withdrawals remain suspended. It “expects” withdrawals to resume within 48 hours of its announcement early this morning. The exchange has also corrected its original incident announcement, which initially stated that both deposits and withdrawals were suspended. There is still no verified evidence of native DOGE having been stolen in this incident. For now, I would obviously continue to be very cautious about leaving any unnecessary funds on the exchange. Withdraw when you can. As usual, ignore anybody contacting you privately with offers to help recover funds or bypass withdrawal restrictions.

In case I haven't made my position on the Dogecoin channels clear enough. Honest companies will create their own channels and push their own channels, not take control of community-run ones. And to all the directors of the "Foundation" who allowed this and other things to happen: I am disgusted, about this and about many other things, like the shilling of private companies and the shilling of corporate maneuvers via marketing posts through all your channels. And I know that some of your old selves would be disgusted by it too. I am really not mad or angry; I hardly ever am. I am disgusted.

To be noted, in case this were not clear enough.

My intervention was among other things AGAINST the takeover of the dogecoin channels by Dogecoin Labs. They took control of community resources (the old dogecoin_devs X account that in the past was used by Dogecoin Core developers was renamed to DogecoinLabs) because the Dogecoin “Foundation” (a group with no mandate to represent the Dogecoin community and which pushed several disasters over the past years) gave them access to the channel. I am against all of this and disgusted by it. Do not try to frame my opinion in support of it.