Justice Minister Astri Aas-Hansen warns of a threat to societal security, KTH professor Niklas Arvidsson says the incident should change how crypto is viewed, and TV4 points to damaged trust after what is described as crypto history's biggest theft.
Binance, the world's largest crypto exchange, was hit yesterday by what may be the largest theft in crypto history. The company has itself confirmed a financial loss of around $6.3 billion. The incident has triggered reactions far beyond the crypto industry: Norwegian authorities, Swedish academia and Swedish national television have all pointed to what the theft could mean for trust in the sector and for people who do not themselves trade crypto.
Justice and Public Security Minister Astri Aas-Hansen (Ap) says the theft at Binance is a reminder that Norway must take its own cybersecurity seriously. – This isn't just about your own security and protecting your own bottom line – in the most serious cases it can be a matter of societal security, she tells Aftenposten.
Earlier this week, Norway's National Security Authority (NSM) raised its cyber risk level to the second-highest, an assessment that had not previously been made public. Aas-Hansen points to the government's proposal for a significant strengthening of NSM in the state budget, including the «Cybersjekk» service, where Norwegian businesses can check the state of their digital security.
The minister says she is concerned about what the stolen funds could finance. – Without speculating about who is behind this, we know that this kind of money can do great harm in the wrong hands. It can finance illegal services and goods, criminal networks' harmful activities, and even authoritarian regimes, she tells NTB.
Niklas Arvidsson, professor of industrial economics at KTH, researches payment systems and digital money, including cryptocurrencies. He calls the hack extremely serious. – It could be one of the biggest ever, he tells SvD Näringsliv.
Arvidsson points out that crypto exchanges lack the safeguards found in the ordinary banking system, where deposits are covered by a state bank guarantee and banks are supervised by financial regulators. – Nations, central banks and their equivalent financial regulators lack oversight, and trading venues for crypto don't necessarily meet the standard we want society to hold a financial actor to, he says.
He is unsure whether the incident will actually change the view of cryptocurrencies, although he believes it should. The professor is also skeptical that private savers can trust Binance's promise of full repayment: – No, in previous major crypto problems and scandals it hasn't happened in full, so I don't think you can count on it, he says, pointing to the exchange Mt. Gox, which collapsed more than a decade ago after a similar attack. Arvidsson adds that the theft pushed the bitcoin price down 3.5 percent.
The hack has also drawn reactions on Swedish TV. – It damages trust in the system as a whole. That's the real risk, says Emil Hellerud, tech reporter at TV4, on Nyhetsmorgon.
Because Binance is the world's largest crypto trading platform, the incident affects a huge number of people. – It's probably hundreds of thousands, maybe even millions of private individuals who have an account on this exchange. Binance itself has promised that everyone will get their money back. Exactly how that will happen isn't really known, says Gunnar Harrius, economics journalist at Dagens Industri.
Hellerud distinguishes between blockchain technology itself, which he describes as secure because it isn't centralized and is therefore considered impossible to hack, and Binance's own systems. According to the company's own account, a single employee's computer was hacked. He argues that crypto exchange platforms in general are too vulnerable: – You can see now that Binance is falling on the exchange, and that some cryptocurrencies are also falling in value, because it's a currency that's very sensitive to events, he says.
Sources: Aftenposten, NTB, SvD Näringsliv, TV4 Nyhetsmorgon
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