Binance Client Execs Abducted and Forced to Empty Crypto Wallets, CZ Freezes Funds

Binance Changpeng Zhao

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Sujha Sundararajan

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Sujha Sundararajan

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Sujha has been recognised as 🟣 Women In Crypto 2024 🟣 by BeInCrypto for her leadership in crypto journalism.

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November 17, 2023 11:44 EST

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Executives from a client company of Binance were kidnapped to Montenegro and lured into a massive $12.5 million crypto robbery.

According to Changpeng Zhao (CZ), CEO of Binance, the kidnappers lured senior staff from one of Binance’s client companies onto a ‘business trip’ to Montenegro. They were later forced to empty their crypto wallets, draining $12.5 million in total.

In a swift response, CZ said on X (Twitter) that Binance managed to freeze $11.8m of the $12.5m stolen funds. The kidnappers apparently took the funds in USDT and transferred them to a Tron wallet.

Executives from a client were lured on a 'business trip' to Montenegro, where they were abducted and forced to empty their wallets. Total loss ~$12.5m.

We investigated the on chain activities and reached out to our partners earlier today to have the wallet frozen, as all of the…

— CZ 🔶 BNB (@cz_binance) November 10, 2023

“We investigated the on-chain activities and reached out to our partners earlier today to have the wallet frozen,” CZ wrote.

CZ’s Response to Crypto Community

The heist has ignited discussions among the crypto community regarding the authenticity of crypto security in exchanges when someone can freeze personal wallets.

It's a balance, and there is no perfect balance point.

If you use XMR, then there isn't much anyone can do (or to help you with), as far as I know. Bitcoin can be traced, but not frozen, until you send it to a CEX. 🤷‍♂️

— CZ 🔶 BNB (@cz_binance) November 10, 2023

In response to the question, CZ emphasized on the importance of finding a balance. “It’s a balance, and there is no perfect balance point,” he wrote. He also mentioned that dealing with such confiscation is complex in a system and can’t be completely frozen.

“If you use Monero (XMR), then there isn’t much anyone can do (or to help you with), as far as I know. Bitcoin can be traced, but not frozen, until you send it to a CEX.”

However, many users responded with a positive note to the action taken by Binance to freeze the stolen funds. “Great Job CZ,” said one user, while another appreciated the “swift response and recovery efforts” made by the exchange.

Further, the incident has put a spotlight on the security challenges faced by CEXs. It also highlights the measures taken by them to protect users’ assets as well as their identity and privacy.

However, there are also some possible impacts such as increased scrutiny from regulators on Binance and its security practices. The incident, involving a security breach, could possibly harm the reputation of the exchange. Compensating users by recovering stolen funds might also hurt the financial market, affecting trading volumes and token prices.