Binance’s $6.3B hack raises the alarm on crypto storage

The alarm bells are ringing again around crypto security, as hackers pulled off yet another hack in the billions. The industry is receiving a public flogging over the recurring security issues. Many have concluded that crypto is unsafe and frankly not worth the risk.

When hackers stole $6.3 billion from Binance just last week, attackers gained access to the company’s systems. They moved billions of dollars in digital assets out of its wallets. That made it the biggest crypto theft on record, from the world’s largest cryptocurrency exchange.

For customers, the incident directly shows the risk of trusting someone else to hold cryptocurrency. But from the beginning of cryptocurrency we know today, these assets weren’t intended to sit in exchanges like Binance. The original philosophy of decentralization centered around keeping assets in a wallet that only the owner controls.

The Risks of Keeping Crypto on Exchanges

Centralized exchanges have made cryptocurrency readily accessible. Platforms like Binance allow users to buy, sell and store digital assets without needing much technical knowledge. However, keeping crypto on an exchange is different from holding it in a personal wallet.

When users store assets on an exchange, the company typically controls the digital keys needed to move them. Users are trusting that its security systems will protect their money and that withdrawals will remain available when needed. If hackers penetrate those systems, a single attack can expose enormous amounts of cryptocurrency.

Binance is certainly not the first major exchange to suffer such an incident. In February of last year, hackers stole $1.5 billion from Bybit. The FBI attributed the attack to North Korean hackers, associated with the country’s Lazarus cybercrime operations.

In the case of the Bybit attack, the hackers didn’t steal passwords or private keys. Instead, they compromised software used to approve transactions. They tricked authorized employees into signing instructions that gave the attackers control of the funds.

Investigators have also linked the recent Binance attack to suspected North Korean hackers. The full details of the breach are still under investigation.

Both incidents demonstrate how even well-funded exchanges with sophisticated security systems fall victim to attacks. For individuals and businesses holding cryptocurrency, reducing exposure to these risks is now a priority. The aim is increasingly to keep assets under their own control.

Bringing Crypto Back Into Users’ Hands

This approach, known as self-custody, allows people to store and manage cryptocurrency without relying on an exchange. Hardware wallets take it a step further. They keep the keys used to authorize transactions on a dedicated physical device, rather than an internet-connected computer.

Just last week, as the largest hack in crypto was underway, Ambire unveiled its hardware wallet, Ambire Ice. The device aims to help users protect their assets. It also aims to make it easier to understand exactly what they’re approving when moving cryptocurrency.

The latter feature is particularly relevant following the Bybit attack. Even when private keys stay secure, attackers can still trick users into approving harmful transactions. That happens if they cannot clearly see what those transactions will do.

A feature known as clear signing stands to address this specific vulnerability. Instead of simply asking someone to approve a string of technical information, the device displays the individual actions involved in a transaction. Users review where funds are going, what permissions they’re granting and whether someone is attempting to change who controls a wallet.

Ice works specifically with Ambire and Safe smart accounts. These allow individuals and organizations to manage cryptocurrency using more flexible security rules, including requiring approval from multiple people before funds can be moved.

Inside Ambire Ice

Ambire says the device includes two security chips designed to protect its keys, alongside a physical switch that can disconnect it from USB data and Bluetooth connections. Users can instead sign transactions offline using QR codes. The company says it has made the hardware designs and software open-source, allowing developers and security researchers to inspect how it works.

While these features aim to reduce the risk of malicious transactions, they cannot guarantee protection against every attack.

A Different Way to Think About Crypto Security

Ambire is part of a wider industry effort to improve how cryptocurrency wallets protect users. Companies including Ledger and Trezor have developed similar transaction-verification features, while Ethereum developers have been working to make the information people see before signing transactions easier to understand.

Ambire says Ice is expected to ship in early 2027, with early-bird pricing for the first 200 pre-orders.

Self-custody still comes with responsibilities. People must protect their wallet recovery information, avoid scams and take care when authorizing transactions. That’s different from a traditional bank account because there is no customer service team capable of recovering lost funds.

Centralized exchanges will remain popular, particularly among newcomers who value convenience. Binance has said that user funds are safe.

Still, a $6.3 billion hack is a slap in the face to remind crypto users what happens when enormous amounts of cryptocurrency are concentrated in one place. Hardware wallets offer another option, giving users greater control over their assets while attempting to make that control safer and easier to manage.

For an industry built around financial independence, making self-custody practical for ordinary users is as important as preventing the next major exchange hack.