Binance founder Changpeng “CZ” Zhao has warned that artificial intelligence could trigger a new wave of sophisticated cyberattacks targeting cryptocurrency exchanges and traditional banks, following the reported $6.4 billion theft from Binance. According to Zhao, financial institutions must accelerate the adoption of AI-powered security systems to keep pace with increasingly advanced attackers.
“The industry needs to use AI to prevent AI hacks,” Zhao said, arguing that hackers are gaining access to advanced AI capabilities faster than financial institutions can develop effective defenses. He emphasized the imbalance between attacking and defending complex systems, noting that attackers only need to identify one vulnerability, while defenders must discover and eliminate every potential weakness.
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The warning comes after the October 29 Binance incident, which the FBI attributed to North Korea’s TraderTraitor hacking group. However, Zhao did not directly discuss North Korea's involvement in the interview, focusing instead on the broader cybersecurity risks created by rapid advances in artificial intelligence.
An important distinction has emerged regarding the movement of the stolen funds. Blockchain analytics firm Elliptic found that the laundering process appeared to rely on automated scripts rather than independent decisions made by AI agents. The firm said it had found no evidence that AI agents were directing the movement of the stolen assets. This assessment concerns the laundering process and does not establish whether AI was involved in the original security breach.
Zhao also warned that traditional financial institutions could face serious vulnerabilities as AI tools become more accessible to cybercriminals. In his view, banks may be even more exposed than cryptocurrency exchanges, highlighting the need for stronger security infrastructure across the entire financial sector.
Beyond individual companies, Zhao called for the creation of common cybersecurity standards or an industry alliance that would allow financial institutions and cryptocurrency platforms to coordinate their responses to emerging threats. Discussions are reportedly underway, although no specific agreement or framework has been announced.
Meanwhile, Binance's withdrawal figures offer another indication of how customers responded to the incident. Zhao said an initial $3.6 billion in outflows represented approximately 2% of the exchange's holdings, implying total assets of around $180 billion based on that estimate. He added that he had expected withdrawals to reach between 10% and 30%.
Separate figures shared by Binance CEO Richard Teng showed approximately $10.97 billion in withdrawals and $5.28 billion in net outflows over a 46-hour period ending Tuesday. Teng said hourly deposits had begun exceeding withdrawals, although the exchange remained in net outflow over the full reporting period.
The incident highlights a growing challenge for the digital asset industry: security systems must evolve as quickly as the technologies available to attackers. If AI-powered cyberattacks become more sophisticated, exchanges, banks and custodians may face increasing pressure to invest in automated threat detection, continuous monitoring and coordinated security standards. For the cryptocurrency market, the ability to protect customer assets and maintain confidence could become one of the defining tests of the next phase of industry development.
