Binance founder Changpeng Zhao has warned that traditional banks may be more vulnerable to cyberattacks than cryptocurrency exchanges as artificial intelligence gives hackers increasingly powerful tools, following a $6.3 billion theft from the digital asset platform.Zhao, widely known as CZ, said financial institutions were struggling to keep pace with attackers exploiting advances in artificial intelligence. His assessment came after the 29 October breach at Binance, which the company valued at approximately $6.34 billion, the largest cryptocurrency theft recorded.
“If a crypto exchange can be hacked, banks are in a worse position, in my opinion,” Zhao said in an interview. His comparison was an opinion rather than a finding supported by comprehensive data on the relative frequency or severity of attacks against banks and exchanges.
Zhao argued that attackers need to identify only one weakness to penetrate a system, whereas defenders must identify and address every significant vulnerability. He urged cryptocurrency businesses to deploy artificial intelligence against increasingly sophisticated attacks and develop shared security standards.
“The industry needs to use AI to prevent AI hacks,” he said. Zhao, who no longer manages Binance, also advocated greater cooperation among companies and public authorities, saying discussions about an industry security alliance were under way without an agreed structure.
The warning has acquired wider significance as banking supervisors in the United States have sought information about possible vulnerabilities following the Binance theft. Supervisors at the Federal Reserve and Office of the Comptroller of the Currency contacted banks to ask about unusual activity and potential service disruptions, while financial institutions examined their own safeguards.
There has been no established evidence that the methods used against Binance could successfully compromise a particular bank. Banks generally operate payment controls, compliance checks and procedures that can sometimes interrupt or reverse fraudulent transfers, unlike confirmed cryptocurrency transactions, which are ordinarily irreversible.
The distinction matters because a successful intrusion into an exchange can allow stolen digital assets to be transferred rapidly across blockchain networks. Some tokens can subsequently be frozen by issuers, but tracing cryptocurrency does not necessarily mean investigators can recover it.
Binance said attackers compromised employee devices and internal systems through a campaign involving fraudulent recruitment approaches and malicious software. The intrusion ultimately affected the infrastructure used to authorise transfers from online wallets. The exchange said its investigation had found no evidence that wallet private keys were leaked.
US authorities attributed the attack to a North Korean hacking operation. The allegation concerns the identity of the attackers and does not establish that artificial intelligence was responsible for the breach. Zhao did not provide evidence linking AI directly to the theft.
Blockchain investigators also cautioned against confusing automated transactions with autonomous artificial intelligence. Elliptic co-founder Tom Robinson said the movement of stolen funds appeared automated, but investigators had not identified evidence that an AI agent was making laundering decisions.
Binance has pledged to absorb the losses rather than pass them to customers. Its 3 November update said the company had reserved sufficient funds to cover the stolen assets and had replenished 98 per cent of the affected tokens, with purchases continuing for less liquid holdings.
The company also estimated that $2.85 billion of the stolen assets had been frozen or intercepted, although the amount remained subject to reconciliation and changes in market prices. It said the affected wallet system had been rebuilt, compromised credentials disabled and additional security checks introduced.
Further measures include an independent cybersecurity review, increased investment in AI-based monitoring and stronger protection of employee devices and development environments. Binance has also proposed a security research fund and initiatives involving technology companies and other cryptocurrency businesses.
Zhao said he had expected withdrawals to reach between 10 and 30 per cent of Binance's holdings after the attack. Actual withdrawals were smaller than he anticipated. Company figures covering a separate 46-hour period showed $10.97 billion in withdrawals and net outflows of $5.28 billion.
The broader debate remains unsettled. International Monetary Fund research has identified banks as frequent targets of cyber incidents within finance, but available figures do not provide a reliable like-for-like comparison with cryptocurrency exchanges. Differences in reporting, transaction reversibility and the definition of a successful breach complicate assessments of which institutions are more exposed. The IMF has warned that interconnected financial systems can transmit operational disruption beyond the institution initially targeted by attackers.
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Cryptocurrency