From Cointelegraph · By Lissele Pratt
Opinion by Lissele Pratt, co-founder, Capitalixe
Last weekend, the Federal Bureau of Investigation claimed that North Korea was behind the $6.3 billion Binance hack, which analysts are calling the largest heist on record.
While I’ve read a lot about the scale of this heist, far less has been said about what went right.
Because while it is true that the perpetrators stole $6.3 billion, they haven’t actually been able to hold on to a significant proportion of those takings. $2.85 billion of the funds has been frozen.
The reason for this comes down to what the stolen money was comprised of. Of that $2.85 billion, 94% was held in stablecoins.
While this hack was terrible news all around, it did show that centralized control, oftentimes criticized by crypto purists, might actually be one of the strongest tools we have against crypto crime.
Because, unlike other assets, stablecoins can be frozen by their issuers, giving victims a real chance to stop stolen money reaching the wrong hands.
It does, however, raise an uncomfortable question. If private companies have the power to freeze billions of dollars in assets, who decides when they should be allowed to use it?
The United Kingdom now has the opportunity to do just that.
The race to get rid of stablecoins
To get an idea of just how much the freeze mattered, you just have to look at what the hackers did within the first hour of their heist.
Related: Binance, Polymarket seek Polygon hard fork to recover $6.8M in stolen crypto
Clearly, they understood that there was a very limited window to move the stablecoins before anyone could stop them. So that’s exactly what they did.
What was frozen from the Binance hack. Source: Elliptic
Less than an hour after the hack began, they had already sold $325 million worth of stolen USDT (Tether’s stablecoin) for Ether. The reasoning behind this was to swap an asset that could be frozen with one that could not.
Luckily, stablecoin issuers were quick to act, with Tether’s first major freeze coming just 37 minutes after the stolen funds reached the hackers’ main wallet, and Circle following three minutes later, blocking the movement of USDC.
Without Tether and Circle intervening, far more of the funds could have ended up beyond their reach.
We’re yet to agree on the rules
The freeze, to its credit, worked for the most part because a handful of companies decided, in real time, to use it.
The problem is that there still isn’t an agreed standard that outlines when a freeze is justified or how quickly the response needs to be, and we’re beginning to see the consequences of not having these answers.