Binance breach linked to North Korea, Buffett & Munger critique
Binance, the world’s largest cryptocurrency exchange, disclosed a breach that may rank among the biggest crypto heists ever recorded. The company said its initial investigation points to a compromised laptop belonging to a DevOps engineer, which allowed an attacker to infiltrate a service container and submit unauthorized withdrawal transactions. The FBI has attributed the attack to North Korea, and Binance has pledged to cover user losses arising from the incident.
The breach comes amid longstanding criticism of Bitcoin from two of the most influential investors in the United States. In May 2018, Warren Buffett described Bitcoin as “probably rat poison squared” during Berkshire Hathaway’s annual shareholder meeting, adding that he could almost certainly see a bad ending for the cryptocurrency. He said he would gladly buy a five-year put on every cryptocurrency but would never short even a dime’s worth. Buffett reiterated his bearish stance in 2021, avoiding direct questions on Bitcoin to sidestep potential backlash from long-term supporters.
Charlie Munger, Berkshire’s former vice chairman and longtime Buffett collaborator, was even harsher. At the 2018 meeting he called cryptocurrency trading “just dementia” and labeled Bitcoin a “financial product invented out of thin air.” Munger warned that Bitcoin is useful to kidnappers and extortionists, describing the entire development as “disgusting and contrary to the interests of civilisation.” He likened the phenomenon to “somebody else trading turds and you decide I can’t be left out.”
Despite the scathing remarks from Buffett and Munger, Bitcoin’s price has continued to climb, having risen from zero in 2010 to nearly $10,000 in 2018 and experiencing further volatility since then. The recent Binance incident underscores the security challenges that persist in the crypto ecosystem, even as the asset class gains broader acceptance and market participation.
Why it matters
Banking and finance professionals need to track crypto security breaches and high-profile investor criticism as they influence regulatory scrutiny and market confidence.
FAQ
What caused the Binance breach?
Binance says a DevOps engineer’s compromised laptop allowed an attacker to access a service container and submit unauthorized withdrawals.
Who does the FBI attribute the attack to?
The FBI attributes the attack to North Korea.
What was Warren Buffett’s description of Bitcoin in 2018?
He called Bitcoin “probably rat poison squared” and said he could almost certainly see a bad ending for it.
How did Charlie Munger characterize Bitcoin?
Munger called cryptocurrency trading “just dementia,” called Bitcoin a “financial product invented out of thin air,” and said it is useful to kidnappers and extortionists.
Source: Economic Times Markets. See the original source for full details.
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