This Week in Startups
00:00:00 · Jason Calacanis, Lon Harris
[00:00:00] S0: Twist, Friday, 10/30/2026, year of our lord. Binance has been hacked for billions of dollars unknown based on my cursory look at this, if this is an superintelligence cyberhack, if this is a spy, a vixen, dare I say, there's been these alerts, like, watch out for romantic interludes trying to get your laptop. Male, female, across the board by a gay, straight, whatever. I mean, if you watch the Americans, this can come at any angle. No. It's not just dumb guys. It could be girls. It could it could be gay guys. It could be lesbians. Anything is on the table when it comes to that type of hacking. Or is it just a vanilla cyber hack without AI? Who knows? Tell us what's going on. [00:00:58] S1: So, yeah, Binance, they are the world's largest crypto exchange station. They were hit by a complex attack affecting an estimated $6,300,000,000. That makes this the largest, crypto hack in history or in [00:01:11] S0: Hold on a history. Sec. Largest crypto hack. Has there been a larger theft? [00:01:17] S1: Oh, great question. [00:01:18] S0: Gold, diamonds. Let the team go research that. This might be the largest theft bank robbery if we consider it in that vein. I believe this is the largest bank robbery in history. I don't know. It would have knocked off Lufthansa for bank... Oh, it's [00:01:34] S1: in The Lufthansa heist couldn't have been anywhere close to this. Yeah. No. [00:01:37] S0: Keep going.
00:01:37 · Jason Calacanis, Lon Harris
[00:01:37] S0: Keep going. [00:01:38] S1: Google AI is saying that you are correct, but we'll keep look... We'll keep looking that up. Binance says it will cover all losses and has set aside more than $6,300,000,000 of company funds to do just that. Deposits and withdrawals are suspended while it runs security checks. Early investigation, that's all we've got so far, reveals that a compromised engineer's laptop may have allowed the attacker to submit unauthorized withdrawals. That's that's about all the information we have on the cause right now. Tether, Circle, Ripple, Ripple, and World Liberty Financial have helped freeze affected assets. About 3,000,000,000 is frozen on chain so far. Now, Jason, before we we discuss this, I do wanna play this classic J Cal take. This is 07/07/2021. Twist episode 12, five, one. Here's some Jason's thoughts for 2021 about whether you should [00:02:26] S0: Starting to lose weight, but still a little chubby. [00:02:28] S1: Go ahead. A little bit. Here's here's your one whether you should leave your money in one of the big crypto exchanges.
00:02:28 · Lon Harris, Jason Calacanis
[00:02:28] S1: Go ahead. A little bit. Here's here's your one whether you should leave your money in one of the big crypto exchanges. [00:02:33] S0: If I... If was me, I would take any crypto I bought on these exchanges, and I would move them to either a valid exchange or to my own wallet as quick as possible. I would not trust leaving your money in Binance. That sounds like the stupidest thing you could ever do. So anybody who has a Binance account with any amount of money on it, listen to me now. Take every single penny out of Binance and put it into your own personal wallet, or take it off the exchange, put it in cold storage, put it on an exchange that is based in a region where they are regulated. Absolutely do not trade on these exchanges, and if you insist on trading on them, why would you leave any amount of money up there? Get it all out of there as quick as possible. It's my best... [00:03:18] S1: There you have it, folks. [00:03:19] S0: Okay. The context here on that date was what? So if we were to look up the news that that was pegged to, I'm curious, I wonder if they had been hacked, and that's what I was responding to. I wonder what the context is here. [00:03:31] S1: Will look it up. Give me one second. [00:03:32] S0: -Yeah. Because I think what happened was CZ was at some point pardoned by Trump. Mhmm. And then before that, he had done something to go to jail. Correct? Like, there was This
00:03:32 · Jason Calacanis, Lon Harris
[00:03:32] S0: -Yeah. Because I think what happened was CZ was at some point pardoned by Trump. Mhmm. And then before that, he had done something to go to jail. Correct? Like, there was This [00:03:49] S1: was... Binance had been banned in The UK. Barclays, was taking action against them, and Binance was banned in The UK. That was the context here. I do, the CZ conviction that Trump pardoned him on, that was... Guilty plea was 2023, sentencing was 2024, and then they got the pardon in 2025. [00:04:09] S0: Was that a United States thing, or is it outside The United States? I was trying to remember all the CZ stuff. This is one of the interesting things about these pardons and white collar crime or alleged crime. You know? He could have been innocent, and, Trump saw this tremendous injustice and did the right thing. [00:04:32] S1: Was the the US department [00:04:33] S0: something else. [00:04:35] S1: The US department of justice is what it went after him. CZ is a Canadian national. [00:04:40] S0: So did he go to jail in Canada, or did he go to jail in The United States? I I I don't know The United States. Case is... Yeah. There's so many of these that occurred at the same time. Nikola, obviously, the founder of Nikola, and obviously FTC, and Elizabeth Holmes. And two of those people still in jail. The other two got pardons. CZ's worth a $110,000,000,000. Wow.
00:04:40 · Jason Calacanis, Lon Harris
[00:04:40] S0: So did he go to jail in Canada, or did he go to jail in The United States? I I I don't know The United States. Case is... Yeah. There's so many of these that occurred at the same time. Nikola, obviously, the founder of Nikola, and obviously FTC, and Elizabeth Holmes. And two of those people still in jail. The other two got pardons. CZ's worth a $110,000,000,000. Wow. [00:05:06] S1: Yeah. He did go to jail in The United States. He plead plead guilty to The US Bank Secrecy Act violations and failing to maintain an adequate anti money laundering program at Binance. He was sentenced to four months in prison. He served his sentence at a low security facility in California. Oh, Lompoc. Famous California prison. Lompoc.
00:05:26 · Jason Calacanis
[00:05:26] S0: And he owns, 90% of, the company, so this is obviously very personal. I think, you know, I'm gonna... Putting aside whatever happened with CZ previously, he's obviously worth tens of billions of dollars, and this would be a fatality if he hadn't backstopped it. And so you you gotta give him credit for getting on this early and backstopping it. I know he was, on Twitter, like, while this was happening in real time, saying, no problem. No problem. People were dunking on him. But I'm gonna stop for a second and give him some credit. For somebody who's worth tens of billions of dollars to say, this happened in my crypto exchange. I am... He he's... It's not a public company. He owns 90% of it. It's a privately held... Tightly held company. For him to just come out and be like, don't worry. Backstopping it for $3.04, 5,000,000,000, whatever the losses are. That's great. That's significant. That's probably 20% of his net worth or something. But better to keep you up for 80% and pay this. I'm just gonna give CZ, you know, a shout out here for doing that, but I will stand with my comments previously, which is, it's a bit crazy to keep a large amount of your net worth in any one bank account exchange, etcetera, in today's market. We learned this from Silicon Valley Bank, where the FDIC limit is $250,000 per account. I don't know if that's changed at all. And then, a bunch of the, I don't know if it was RAMP or Mercury or Silicon Valley Bank two point zero, other folks started pitching our startups and us on, hey, if you raise a $3,000,000 round, here's an idea for you. We will set up 10 bank accounts for you. Put 300 k in each one, and then the FDIC will backs up $2.50 in each. Your total exposure will be, you know, 500 k instead of this. Whatever. You got to really think of the worst case scenario, and I always tell founders, do not give all your money to one bank. I always maintain multiple banks, multiple bank relationships, spread the money out a little bit in case you get stuck like this. It's a really important concept for people to take to heart, and crypto especially. And then how this stuff got sucked out, we're going to have a big postmortem on it. I do think everybody has to stop what they're doing in terms of developing new features. We should have a holiday or a tradition now that we do... You know how they have...