At 9:16 p.m. on October 30, CFTC Chair Michael Selig posted a line on X: “This $6.4 billion Binance theft proves that offshore exchanges must register in the United States.”
He included a link to Decrypt’s report.
That afternoon, Binance had just disclosed the largest hack in history—roughly $6.3 billion to $6.4 billion in assets had been transferred out. The attackers were reportedly linked to North Korea and used EIP-7702 delegation and a self-destruct mechanism to bypass approval.
Selig reacted even faster than the on-chain fund transfers.
He wasn’t just talking about registration, but also “U.S.-grade cybersecurity standards.” Offshore exchanges aren’t under CFTC jurisdiction, so this case wasn’t really his to weigh in on. But with the election just ten days away, everyone wants to grab the microphone.
That same day, analysts at Cantor Fitzgerald, TD Cowen, and Compass Point sent clients a different story.
Their take was clear-cut: this was a Binance security incident, not a systemic risk to the crypto industry. Then they recommended Coinbase, Robinhood, and Strategy—the so-called “Bitcoin proxy stocks.”
Interestingly, on Friday, October 30, Coinbase itself was leading the decline. Crypto-related stocks like Circle and Strategy plunged along with it.
Analysts were saying, “Don’t panic, buy proxy stocks,” while those very stocks were being sold off.
Wall Street always has two scripts: one for the media, and one for clients. In the client version, a hacking incident is a reason to sell stocks, not a risk warning.
And Binance? Richard Teng said it had set aside $6.34 billion in reserves, recovered 90% of the stolen assets, and aimed to reopen withdrawals by Sunday.
Tether and Circle helped freeze some of the funds, with Circle freezing $823 million. The FBI and Secret Service also got involved.
But the attackers converted the stablecoins into harder-to-freeze tokens before they could be frozen. Binance is still gradually buying up the remaining shortfall over the counter.
Back to politics. On October 31, Cointelegraph ran a story titled “Binance $6.3B record hack sparks pre-election political clashes.”
The story didn’t name who was “exploiting” the incident. But Selig’s statement came at a very precise moment—just days before the election.
The CFTC has been pushing for mandatory registration of offshore exchanges for more than a year. Every major case creates a window of opportunity.
Six billion dollars is just the right size.
Bitcoin held up better than it did in 2018. When Binance was attacked that year, BTC fell nearly 11%. This time, it dropped only around 3%.
Strive CEO Matt Cole said this hadn’t changed his reasons for being bullish on Bitcoin long term, but it was too soon to say the market had bottomed.
That sounds like saying nothing at all, but at least it’s more grounded than “buy proxy stocks.”
That same day, Chainalysis was reported to have suffered a cybersecurity incident, exposing user IDs, names, and email addresses. Even the company that does forensic work for exchanges got hacked.
I’m not sure how to interpret that coincidence.
Each of the three parties has something to gain: Selig wants jurisdiction, politicians want votes, and Wall Street wants to sell stocks. Binance wants to get its withdrawal channels open before Sunday.
The $6 billion is a prop in this drama, not the script.
The real question remains unanswered: If a standard like EIP-7702 can let self-destructing contracts bypass approval, whose risk controls will be bypassed next?