CZ warns of more AI-driven hacks following Binance’s historic $6.4 billion heist

Binance founder Changpeng “CZ” Zhao warned that artificial intelligence (AI) could unleash more cyberattacks against cryptocurrency exchanges and banks, following the $6.4 billion theft from Binance last week.

“The industry needs to use AI to prevent AI hacks,” Zhao said in an exclusive interview with CoinDesk. “There's no other way.”

Zhao, who no longer runs Binance, said hackers were gaining access to AOI capabilities faster than financial institutions could deploy them to protect their systems.

“For attack, you only need to find one crack. To defend yourself, you need to find all the cracks and then fix them,” he said.

The warning follows the Oct. 29 Binance heist, which the FBI attributed to North Korea’s TraderTraitor hacking group. Zhao did not mention North Korea during the interview, focusing instead on the security risks facing cryptocurrency exchanges and banks as AI advances.

However, investigators have found no evidence that AI laundered the stolen funds. Blockchain analytics firm Elliptic said that the transactions appeared to follow automated scripts rather than decisions made by AI agents.

*Read all of CoinDesk's coverage of the Binance hack here.*

“Our assessment is that the laundering is automated, but nothing we have seen shows an AI agent making decisions,” Elliptic co-founder Tom Robinson said.

The findings concern the movement of stolen funds, not how the hackers initially breached Binance. Zhao did not provide evidence that AI played a role in the attack.

Zhao said the risks extended beyond cryptocurrency.

“If a crypto exchange can be hacked, banks are in a worse position, in my opinion,” he said, arguing that traditional financial institutions could face similar threats as AI improves attackers' capabilities.

He also called for common security standards or an industry alliance to help firms respond to attacks. Discussions were underway, he said, although no details have been agreed on yet.

Zhao addressed customer withdrawals following the theft, saying an initial $3.6 billion in outflows represented about 2% of Binance's holdings, implying roughly $180 billion in assets. He said he had expected withdrawals of between 10% and 30%, equivalent to $18 billion to $54 billion based on that estimate.

Figures Binance CEO Richard Teng shared showed $10.97 billion in withdrawals and $5.28 billion in net outflows over a separate 46-hour period ending Tuesday. Teng said hourly deposits had begun exceeding withdrawals, although the exchange remained in net outflow over the full period.

Zhao also said Tether, Circle and law enforcement agencies helped freeze stolen funds, with the U.S. Secret Service assisting in the effort. Researchers estimated that $2.85 billion has been frozen or seized.

Despite expecting more attacks in the near term, Zhao said AI could eventually strengthen financial security.

“In the short term, I think that we're gonna see a lot more hacks,” he said, adding that stronger defenses could reduce losses over time.