Crypto: Binance pauses withdrawals for 2 tokens after reports of hack

Yahoo Finance’s David Hollerith joins the Live show to discuss the latest crypto news, including reports that Binance has paused withdrawals of two tokens following possible hack concerns, the CFTC chair has called for broader authority to prevent the next FTX collapse, and news that Galaxy will acquire GK8.

Video transcript

JULIE HYMAN: Turning now to the crypto space, which cannot seem to catch a break. According to a tweet earlier today by the CEO of Binance, the cryptocurrency exchange paused withdrawals of two tokens in particular that were potentially targeted by hackers. Here with all the latest, Yahoo Finance's David Hollerith. I mean, this kind of stuff does happen relatively regularly, David. I think it's just all of this is just getting a lot more scrutiny now.

DAVID HOLLERITH: Yeah, absolutely. And this morning, this is two smaller tokens that are not part of the top 100 cryptocurrencies were stolen and have since seen their value plummet. And that's been the Ankr protocol and the Helios protocol. And so what appears to have happened, according to Binance, at least in the initial analysis, is that an attacker stole about $500 million from the Ankr protocol, and that appears to be the result of getting access to a developer's passcode.

Since then, there's also been about $15.5 million that has been either taken by hackers or opportunistically from arbitrage traders who've sort of seen a price difference since the initial tokens were stolen. So, again, this is, for the year, a smaller hack, but obviously, it's just kind of the latest stolen theft we've seen.

And to your point, Julie, we saw the first hearing in the US regarding the FTX collapse yesterday. Testifying before the Senate Ag Committee, Rostin Behnam, the CFTC's chairman, had pointed out to the failures of FTX and essentially suggested how much rank he doesn't have over-- he didn't have over FTX International.

To his point, the one-- and he pointed this out. The one part of the FTX Empire that the CFTC regulated was LedgerX. And LedgerX is the only-- or one of the few companies to be solvent, as far as we can tell, and did not file bankruptcy.

Behnam also went on to emphasize the need for speed and crypto regulation, which is, obviously, an understatement at this point, as it's being measured-- crypto progress in crypto regulation is being measured in years, as opposed to weeks or months now, as much as some people would, I guess, hope. But it does seem like there is a pretty clear consensus between the Senate and, you know, Behnam just about the need to speed up.

And then one more thing I'll point out is just it seems like the hottest thing going on in Q4 for crypto right now is distressed investing of crypto assets. And obviously, that's because we've had a number of bankruptcies over the last couple of months.

And just this morning, Galaxy Digital has announced that they have won the bid for Celsius's-- one piece of Celsius's assets, which is called GKAs, sort of their custody solution. So we don't have the price for that acquisition. But it's said to be materially lower than what Celsius has purchased the business for, which was $115 million.

JULIE HYMAN: All right. Thanks so much, David.