CZ gave an interview to Coindesk yesterday, talking about his state of mind on the night Binance was hacked, his views on security across the industry, and AI's impact on the world. He stressed that he was very happy to see that no users suffered financial losses, and also emphasized that the incident served as a wake-up call for the entire financial system. He believes that if even cryptocurrency trading platforms can be hacked, then traditional banks will only be worse.
The following is a summary of CZ's interview:
The sudden experience of Binance being hacked and full compensation of user funds
Around midnight UAE local time on Thursday—which is 8 PM UTC—I received messages from the Binance team and tips on Twitter at almost the same time, learning that Binance might have been hacked. When you hear news like that, your brain races: Is this real? How real is it? How big will the losses be? In the first half hour to an hour, the amount involved grew very quickly, but I also knew the team had already moved quickly to deal with it.
Although I no longer manage Binance, I am still in the crypto community and have a large following. In this situation, there are basically two parallel tracks of work: one is technical problem containment and remediation inside Binance; the other is communicating with users so they know what happened. As the situation was gradually verified, I confirmed that this was indeed a hack targeting Binance, so I informed the community through my own account and assured all users that their funds were very safe and would not be affected.
After several difficult days, I am very glad that the platform came back online and fully restored withdrawals in just two days. Binance will bear all financial losses, and no users were affected. I am very proud of that.
Only 2% of funds flowed out, confirming strong user trust
$3.6 billion sounds like an astronomical figure, but it is probably only about 2% of Binance's total asset holdings. To be honest, at first I thought the proportion lost would be much higher, and I thought the wave of withdrawals could reach 10%, 20%, or even 30%. But after withdrawals were actually restored, the outflow ratio was only 2%, which fully demonstrates how strong users' trust is in the platform and in Binance.
Over the past nine years, Binance has put all its efforts into building that credibility; and in recently handling this sudden incident, the team's communication approach, sense of responsibility, and efforts to protect user funds further strengthened the community's confidence. The community repaid that trust with action. In the first 24 hours after withdrawals opened, not only was the outflow proportion very small, but according to the latest data I learned a few hours ago, the platform has already turned to a Net Inflow status—funds deposited to the platform began to exceed funds withdrawn. This fully shows that the community still deeply trusts the largest crypto trading platform.
Organic Collaboration Between Industry and Law Enforcement: Mutual Assistance and Win-Win in the Decentralized World
After fund flows moved on-chain, a large number of external forces emerged to participate. From what I understand, there was no central coordination behind this—no one was directing everyone on what to do; everything happened very organically and very quickly. No centralized organization could achieve this level of speed.
Just minutes after I learned of the incident, Tether and Circle had already frozen a large amount of stolen funds. I later learned that the U.S. Secret Service also participated and provided assistance. In addition, multiple cybersecurity companies and law enforcement agencies jointly intervened. The entire industry and community spontaneously united, and even some competitors who are usually not so friendly extended a helping hand.
It is very heartening that the entire industry can unite in difficult times. Binance has historically provided assistance for all security incidents in the industry—whenever others are hacked, Binance always helps trace funds or dispatches security teams to support. This accumulated industry reputation has built good peer relationships. Even in the decentralized world, everyone is still looking out for one another.
The Wake-Up Call This Incident Sounds for the Entire Financial System
This sounds a heavy alarm not only for the crypto industry but also for the entire global financial system. If even cryptocurrency exchanges can be hacked, then in my view, traditional banks are only in a worse position. The crypto industry, especially Binance, bears the brunt as the number one attack target due to its largest size and most concentrated funds.
The returns from hacking crypto platforms are extremely high, while attacking banks, although sometimes profitable by tampering with ledgers, cannot compare in returns to the crypto space. Therefore, crypto platforms are always attacked first, but this does not mean traditional banks are safe in terms of security. With the improvement of AI capabilities, attack methods are constantly evolving, which also tightly binds crypto and traditional finance together in security anxiety.
On the same day Binance suffered a hack, traditional tech stocks and the stock market also declined. Although this was mainly caused by some issues in tech stocks themselves, the hack incident also touched the market's psychological nerves to some extent—is any system in the world really safe? This is not just a crypto problem, but a broader information security issue.
Security Defense Transformation in the AI Era: The Industry Must Comprehensively Upgrade AI Defense Mechanisms
The most core change facing the industry today is: artificial intelligence has made hacking easier than ever, while defenders have failed to fully leverage AI. Attackers only need to find one vulnerability to succeed, while defenders must find all vulnerabilities and fix them all.
Currently, the most advanced AI models are not fully accessible to many crypto projects and smaller players for risk prevention. Therefore, both participants in the crypto space and players across the entire financial industry must extensively use AI to protect themselves. The security of the future will be vastly different from that of the past.
Although in the short term, we may see more security incidents erupt—even after the Binance event, other platforms have been hacked every day in the past few days (such as a Brazilian crypto exchange and several public blockchains experiencing issues yesterday). In the past, a hacking incident might occur once every six months, but now it happens almost several times a day—yet in the long run, precisely because of being forced to use AI for security defense, the industry's overall systems will ultimately become more secure in the future.
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