The Information's TITV
00:40:12 · Akash Pasricha, Yueqi Yang
[00:40:12] S0: Yueqi, I I haven't looked at the markets broadly, but how are the crypto markets responding? Is this a major sell off event right now? [00:40:21] S5: The major tokens, Bitcoin, Ease, Solana, BNB token included, all dropped after the hack. I think Bitcoin now is trading around $77,000 Earlier, a few days ago, it was trading at above $80,000 So it is a drop, but not by too much. I think the market is currently, broadly speaking, relatively confident that Binance as the biggest crypto exchange is able to weather this storm just because of how much money the company has already made. And CZ, which is the co founder of Binance, former CEO, largest shareholder of Binance, he has been putting out tweets basically saying that they are able to pay customers back. And that's because the hack amount was about $6,000,000,000 and then about half of them had already been frozen. So that reduced their exposure to around $3,000,000,000 And they currently have a $1,000,000,000 emergency reserve fund that they can tap into to make up for this gap. And then for the rest of the money, which is around $2,000,000,000 gap, they believe that they can use their own company fund to pay customers back. And of course, the exchange right now has halted withdrawal. They promised that they're hoping to reopen withdrawal in about forty eight hours from this morning. And so we'll need to see what the outflow will look like once the exchange resume processing withdrawal and whether there will be a wrong on the bank situation where customers are rushing to pull their assets off the exchange.
00:40:21 · Yueqi Yang, Akash Pasricha, Nikhil Raghuveera
[00:40:21] S5: The major tokens, Bitcoin, Ease, Solana, BNB token included, all dropped after the hack. I think Bitcoin now is trading around $77,000 Earlier, a few days ago, it was trading at above $80,000 So it is a drop, but not by too much. I think the market is currently, broadly speaking, relatively confident that Binance as the biggest crypto exchange is able to weather this storm just because of how much money the company has already made. And CZ, which is the co founder of Binance, former CEO, largest shareholder of Binance, he has been putting out tweets basically saying that they are able to pay customers back. And that's because the hack amount was about $6,000,000,000 and then about half of them had already been frozen. So that reduced their exposure to around $3,000,000,000 And they currently have a $1,000,000,000 emergency reserve fund that they can tap into to make up for this gap. And then for the rest of the money, which is around $2,000,000,000 gap, they believe that they can use their own company fund to pay customers back. And of course, the exchange right now has halted withdrawal. They promised that they're hoping to reopen withdrawal in about forty eight hours from this morning. And so we'll need to see what the outflow will look like once the exchange resume processing withdrawal and whether there will be a wrong on the bank situation where customers are rushing to pull their assets off the exchange. [00:42:05] S0: Nikhil, do you think that that happens? [00:42:11] S4: I think it will happen. I think... Wait. Sorry. My my mind is
00:42:11 · Nikhil Raghuveera, Akash Pasricha
[00:42:11] S4: I think it will happen. I think... Wait. Sorry. My my mind is [00:42:14] S0: The the raw... I mean, I'm I'm saying when when withdrawals open. Yeah. Is this gonna be a a run on the bank situation? [00:42:21] S4: I see. I don't think it's gonna be a run on the banks. I think exactly what Yueqi was saying. I think the industry has, I think, a good bit of confidence on the operations of Binance. I think they have been around for a while. They do have a lot of capital. I think the the more important question that will... And from a longer term perspective, again, is there's just been a lot of exploits and hacks. And so there's going to be... There's kind of this perpetual concern and challenge around if an organization is planning to deploy or launch a digital asset product, how do you ensure security? How do you have protection around that? And that's really the bigger problem. Right? It's not so much a draw out of capital right now or people saying, wait. This... Like, I need to move my money out. It's more so the scaling of the industry and the deployment of new assets. What are the concerns there? And when you see an exploit like this, if you're a larger financial institution, you might pause or you might take a moment to say, wait. We don't need... We shouldn't rush this. We need to make sure everything is really, really secure. So I think that's really the part that we'll have to navigate.
00:42:21 · Nikhil Raghuveera, Akash Pasricha
[00:42:21] S4: I see. I don't think it's gonna be a run on the banks. I think exactly what Yueqi was saying. I think the industry has, I think, a good bit of confidence on the operations of Binance. I think they have been around for a while. They do have a lot of capital. I think the the more important question that will... And from a longer term perspective, again, is there's just been a lot of exploits and hacks. And so there's going to be... There's kind of this perpetual concern and challenge around if an organization is planning to deploy or launch a digital asset product, how do you ensure security? How do you have protection around that? And that's really the bigger problem. Right? It's not so much a draw out of capital right now or people saying, wait. This... Like, I need to move my money out. It's more so the scaling of the industry and the deployment of new assets. What are the concerns there? And when you see an exploit like this, if you're a larger financial institution, you might pause or you might take a moment to say, wait. We don't need... We shouldn't rush this. We need to make sure everything is really, really secure. So I think that's really the part that we'll have to navigate. [00:43:16] S0: And you actually... Don't mean this in, like, a cheeky cheeky way, but, like, was AI a part of this potentially? We've heard about all these AI aided hacks. Can we assume that that made this all easier for the attackers?
00:43:16 · Akash Pasricha, Yueqi Yang
[00:43:16] S0: And you actually... Don't mean this in, like, a cheeky cheeky way, but, like, was AI a part of this potentially? We've heard about all these AI aided hacks. Can we assume that that made this all easier for the attackers? [00:43:34] S5: We don't know yet. And I think AI is definitely a major concern for a lot of crypto companies just because of how powerful they are, how quickly they're able to detect any vulnerabilities in your coding. But from the initial assessment that Binance put out, it seems like engineers laptop was compromised. We don't know whether that's social engineering or not. A lot of the hacks that happened earlier this year with other exchanges, it seems like oftentimes is some kind of operational security vulnerability. It may not even require AI, and it could be someone just not being careful enough, and there's not enough check and balances set up. So we'll wait to see what Binance comes out with their final assessment.
00:43:34 · Yueqi Yang, Akash Pasricha
[00:43:34] S5: We don't know yet. And I think AI is definitely a major concern for a lot of crypto companies just because of how powerful they are, how quickly they're able to detect any vulnerabilities in your coding. But from the initial assessment that Binance put out, it seems like engineers laptop was compromised. We don't know whether that's social engineering or not. A lot of the hacks that happened earlier this year with other exchanges, it seems like oftentimes is some kind of operational security vulnerability. It may not even require AI, and it could be someone just not being careful enough, and there's not enough check and balances set up. So we'll wait to see what Binance comes out with their final assessment. [00:44:25] S0: Great. Well, want to thank you both for coming on. That is Yueqi Yang from The Information and Nikhil Raghuveera from Predicate here on TITV. That does it for today's show. A reminder, are on this stream Monday through Friday at 10AM Pacific, 1PM Eastern. If you can't make it then, episodes are available on theinformation.com, on our YouTube channel, or wherever you get your podcasts. Make sure to follow us on social media, on X, on Instagram, on TikTok, and on LinkedIn. I am already excited for our next show on Monday. Have a great Friday. Have a great weekend. Have a great Halloween. See you soon. Bye bye for now.