What caused the Binance hack? Eswar Prasad blames crypto's middlemen (opens the source in a new tab)
- Cornell economist Eswar Prasad argues the $6.3bn hack of Binance shows how crypto's promise of decentralisation has been undercut by big centralised exchanges.
- The blockchains were not breached, he says; the weak points lie in the ecosystem around them, from exchanges to oracle software, plus human error such as an apparently compromised laptop.
- He warns AI is helping hackers, including from North Korea, find subtle flaws, and urges regulators to stop a loss of trust spilling into mainstream finance.
Why it matters Investors park coins on exchanges for convenience, recreating the single point of failure crypto was built to remove; that trade-off now carries a record price tag.
Other side Banks get hacked too, and exchanges offer customers the reassurance that losses can be fixed, something a pure self-custody world would not.