Inside the $6.3 billion Binance hack

Transcript

what is as as far as we know the largest heist of any of any kind that's been publicly confirmed in human history happened. >> What's up everybody? It's LGD out here and welcome to the Milkro Show. The daily crypto show that just 4 days ago was trying to decide between 100K and 70K and looks like we're getting our answer today. It is October 30th, 2026. Listen, I was not supposed to do a podcast with John today, but yesterday we got absolutely floored uh as the floor of all our prices got to totally demolished after Binance was hacked.

They were hacked for like I don't even know what the total is. John's going to tell me in a couple minutes. Something like $7 billion. And the industry was quick to react. You know, Tether froze some of the funds, but the funds are being moved around by the thieves very quickly. And everybody's kind of trying to chase them and shut down whatever they're going to use next to move it. But this is by far the biggest crypto hack in history. It is probably the biggest single theft in history beyond crypto of anything because there's never really been $7 billion until you know 20 years ago. So u we're going to talk about it with John. John's going to give us a nice breakdown of that. Uh and naturally we're going to talk strategy like what do you do in something like this? You buying this sphere or do you

really think that we are going to get an actual lower lower lower lower low next month as people like Ben have predicted in the past? A reminder that today's podcast is free and that it wouldn't be possible without our partners at Alumni Ventures, giving accredited investors access to private market investment opportunities alongside leading VC firms. And Nexo, the digital asset platform, lets you trade, earn, and borrow all in one place. Keep an ear out for more information about them later in the show, John. My god, man. We always do. We, you know, at least we weren't live this time because if anybody remembers a year ago on 1010, John went John and I went live in the morning uh to cover the negative price action and then it went even it got even worse. It got even worse like a couple

hours later. Um so let's hope John that after this podcast we do not things don't get progressively worse because the last time we did a show like this that's what happened. >> Well, hello LG. It's uh it's good to be with you. Um I think uh a good a good thing to start with here would just be sort of recap a couple things that happened yesterday. So um yesterday started out in a very bullish way when uh there was an announcement that ICE the intercontinental exchange which is the parent company of the New York Stock Exchange was going to be working with Trade XYZ uh and Hyperlid um to begin bringing perpetual futures on online in America. Uh Stanley Ducken Miller tweeted out about this. I think it was like his first tweet ever. Um and a lot of people thoughtake isn't tweet fake?

>> I don't think it's fake. I think it's >> seems so fake. >> From Dukane confirmed to the Financial Times that it was authentic and it seems to be authentic. I don't know. But then Elon Musk >> retweeted that and he said interesting. >> So setting all that aside, that was all very bullish, right? Um and uh >> so good. Look, maybe it was fake, but as far as I know, it's been confirmed to the Financial Times by a spokesperson from Dukane that it was from Stanley Ducker Miller that it is an authentic tweet. Um, but he is he does still have the position. Whether or not he really tweeted that, he does still have a position in in uh PER, which is the hyperlquid DAT.

>> In any event, the point is that was all very bullish. Then there was an announcement in the afternoon that Poly Market had suffered a a hack. some malicious um software had been uploaded that allowed them to allowed the hackers to take control of users um browser which had permissions and stuff and so they were able to to get I think a couple million dollars um from from Poly Market. They had to freeze Poly Market for a while. This is an attack that has happened before and it's it's kind like a malicious software attack to hack people's browsers again >> and that was people's actual money. That was people's actual money on Poly Market. Those are actual user accounts that was being hacked. It wasn't like the Poly Market bank, you know, or reserves, right?

Yeah. >> Yes. And I think this is an important thing to like help people understand this is like when you hear the word hack, you don't really know what that means or how like it's it can mean a lot of different things. In the poly market situation, the analogy I've been using is that it's kind of like a burglar going in overnight with the cleaning crew and just then walking out with everything. So everything, all the security systems function normally. They just use a malicious piece of software in the browser to um get access to something that they shouldn't have had access to. They snuck in with the cleaning crew is kind of the way I've the analogy I've been going with. I don't know, maybe this is a better one, but they they went in and they got some users accounts, but I think Poly Market

is now on top of that situation and like they're resolving that and it was only a few million dollars, so I think they'll be okay. Um, that was scary. Then what is as as far as we know, the largest heist of any of any kind that's been publicly confirmed in human history happened. Um uh what is apparent right now is that uh uh hackers from North Korea uh were able to get access to Binance 14, which is the the Etherscan name for the hot wallet that was drained. It was one of Binance's Ethereum wallets and there were other assets in there as well. But in any event, they got about 6.3 an estimated 6.3 billion of crypto from Binance. Um the way that they allegedly did this, as far as we know, this is still evolving

and emerging. All this could could change as the story comes out more, but um there was a DevOps engineer at Binance. They got access to their their laptop and were able to get access to these wallets and they move these funds. As far as I understand right now, something on the order of around $2 billion of stable coins um of USDT and USDC has been frozen. So, that'll probably be recovered by Binance. Um uh and then the rest of it they are at this time tracking as the hackers are trying to move these assets into different wallets, shuffle them around, hide the their paper trail and try to basically do something malicious with them or monetize the assets that they've stolen in some way. Um I think that there's been a lot of great communication and leadership on this from Binance. They've already confirmed that they will make

users whole. They have a insurance fund called the SEFU fund. Um funds are SEFU. They're going to make sure all their users are made whole. Um, but it's a big loss to Binance and I think it's, you know, adding to the fears around cryptocurrency and digital assets, but they're working with the Secret Service on this. They're working with law enforcement. They're working with other players in the ecosystem. Um, and I think the encouraging thing is this about this is just like what we saw with the kelp incident with a in April. The entire digital asset ecosystem is collaborating and rallying around each other to support each other um to resolve this to try to, you know, track the hacker to try to get this back. Um, and you know, we can talk about all this more, but that's s sort of like some of what happened yesterday. There was a ton

of news yesterday and it's very confusing and there's a lot of doubt and it's like, oh, was Stanley Ducker Miller hacked? Was Poly Market hacked? Was was Binance hacked? The thing thing to understand about this is that no no cryptography, no crypto, no crypto blockchain ecosystems, no crypto protocols were compromised, were broken, were hacked. It was um a software in a browser for Poly Market and it was you know a compromised um laptop from Binance. And my understanding is that they actually the Binance um keys their private keys signed the transaction that moved the crypto out of their wallets because they got access to the the laptop and to that and were able to do that. So it wasn't like any cryptography broke. Nothing is broken.

Bitcoin is not broken. Ethereum is not broken. A is not broken. And none of these protocols have been um compromised or like or or hacked in any way. Um it's just a you know there's there are other things around these these uh software tools that are able to be compromised and that seems to be what happened here. And so that's some what's going on. >> Listen guys, there are a lot of big names in crypto and you know that they hold a lot of assets. But the problem is that you never get to see all that information in one place and you also don't know when some of those big names actually buy and sell. Well, we have rebuilt milkroad.com just for this use. You can see right here we have all these crypto personalities like Justin Sun, Vitalic, Arthur Hayes, Donald Trump.

Yes, he's a crypto person. Zack XBT, if you know who that is, we have listed all of their portfolios. The stuff that's available publicly right here for you guys to check out whenever you want. If you're curious, what is Arthur Hayes still holding? Did he sell everything? Is he holding anything? It's all here, available in our insider portfolios. And all that is available for free for you guys on milkroad.com. So check it out right now. So, but does that not still pose a huge threat or risk though, John? Because I get I understand what you mean. It's like I agree like none of the protocols, none of that stuff were actually hacked, which is fine. They're the ones that are getting the most attention and money for building security, but inevitably both of these are are some level of like user flow error. You know what I mean? That it's

still like this is a these are human inattentions, let's say, and maybe things that a lot of people didn't even know. I'm sure a lot of people listening in including maybe us are vulnerable to it the same way, right? And more and more, you know, I I don't even know if you call this like not even social engineering. They didn't trick anybody, but so I don't know what kind of hack you would call both of these, but it's still like people's devices were infiltrated. Um they they had access through those devices to large sums and despite those being on crypto protocols that yes, they themselves are not broken. the process itself clearly has holes, right? So, does that not still pose a risk? You know what I mean? Like, yes, quantum in itself of like breaking

Bitcoin, yes, that's one thing. But if nobody can use this stuff because all our devices are vulnerable, it you know, it makes does it not make the point where these things are well built mute? >> So, I think that there's a lot of elements to to what you just raised here. I'll start by saying that I end every episode of Milk or Crypto by saying stay safe, stay educated, and stay bullish. I say stay safe first because that does need to come first. Opsac operational security is paramount to individuals and to institutions and enterprises who are doing business in any industry. Um, but especially ours. Um, crypto is born in the dark forest.

There's a fog of war. You don't know what's out there. You don't know who might be out there. You don't know how they're going to attack you or when. And we are battleh hardened as a result of that. We are used to this as an industry. We are more vetted with these kinds of things than most other industries are and we recover from strongly uh and much more quickly and robustly I think than most other industries do. There are a lot of hacks and and uh let's say opsec issues that are happening right now on a global scale that are not known about because our industry happens to be one of the most public and transparent industries and honest industries in in the despite what people may think. Um, but behind closed doors in secret, a lot of these uh institutions have very poorest uh

operational security and a lot of risks and there are a lot of things being done that just don't get a lot of attention. Um, obviously North Korea has been for a long time targeting our industry and trying to, you know, come up with ways and new ways to attack and and steal funds. I would like to see a response to that by our industry, but that's a separate issue. But look, I you the point you're making is that um there are uh opposite concerns. It doesn't make the industry moot. It just means that people need to be educated about how to protect themselves and their assets. But there's trade-offs to all of this, right? Like if you're going to have custody of your assets, you're going to have more um responsibility that goes with that. People, some people would like that, some people don't. Some

people prefer to hold their their assets in an ETP or an ETF um you know to kind of like offload some of that operational security to other custodians which is fine but everybody has to kind of like figure out how they want to do this themselves. I think that the bigger risk personally is holding your value or your capital outside of crypto in something uh into an asset or into an industry or or somewhere where it's way more porous and way easier to steal and be counterfeited or stolen and other things like that. And again, these things are happening. we just don't hear about them because they're keeping them quiet and paying a lot of money to keep them quiet. Um, so yeah, look, I think that everybody is is going to be nervous about these things. I'm very encouraged by the speed um and uh precision of the

response and the the quality of the response and the fact that they already are sure that they're going to be able to cover the holes and they're working with international law enforcement and other industry partners to to recover the funds that they can. We'll have to keep watching for more information from Binance on this because we really don't know a lot of the details. Um, but yeah, I think obviously it's a scary thing, but it really just confirms the need for crypto and digital assets. And I interviewed Chris Perkins from Franklin Templeton Crypto, and he said that he thinks ultimately this is going to be a net benefit for crypto because it's going to validate the need for cryptographic security and cryptographic truth um as hacks and zeroday exploits start becoming more and more common throughout um technology and and software systems in the world. Um, and

then I'd also say that hib um of of Dragonfly Capital has made this point several times, but in general the way this goes is that when new technologies emerge that are able to break security systems, attackers win initially, but over time that attack surface hardens and then the defenders win and the defense the defended moat like the the castle walls that we build become very strong and robust and impenetrable. crypto is getting going to get attacked the most and the first and so it's the tax surface that we have is going to harden the most and the the the strongest and then I think a lot of other capital and industries are going to move behind that wall that we've built and hardened because they're going to realize that they don't have the way a way to defend themselves without our

help and so I think on the long-term view of this this is going to be very constructive for crypto and I I would just want to say again like I'm very proud of the way Binance has communicated about this has handled this um and we are going to emerge emerge like Michael Sailor tweeted this out. Our industry is going to emerge from this much stronger than it was before and uh you know as we keep having these hacks we keep solving them. Um but eventually the castle walls will be very very strong and the defenders will win in the end and that's the the team that I want to play for. I wrote an an article a wartime Ethereum article called Bunker Mode where I said that Ethereum does not need a bunker.

Ethereum is the bunker and eventually all capital, all financial systems, all all monetary systems are going to realize they need protection from these external threats and I think that Ethereum and digital assets are going to be the place that they go for that. >> Don, isn't this one of those funny things and we're going to talk about the the theft and the hack quite a bit more and I have some other questions for you, but just to bring it back to how I view things. um on the price market or the price action side, you know, a lot of people had been calling for a lot of analysts uh TA people that I follow had been calling for us to go into this range, right? That it's like listen, we're going to, you know, we're going to stay below 80. We'll go to the we'll go

to the 76 77K range. Um, and I'd seen a lot of analysts, not a lot, but a few analysts that I follow, TA people earlier this week say, "Hey, like we are going to, you know, I'm I'm I'm setting I'm going to set some buys in the like in the mid90s on Salana." You know what I mean? Like like some, you know, so there is something in the charts that had alerted people to this despite it being like a black swan. Like how can the charts possibly predict that somebody's going to steal $7 billion? How does that how does that reconcile? You know what I Like I think that that's what's interesting is that there's always this way that you know that that the the TA somehow reflects events when the events have no way of of being predicted, right? And I just think that's just kind of strange.

>> I I think it's kind of strange, too. I think that, you know, people say like, "Show me the price action, I'll show you the narrative." Or, "Show me the narrative. I'll show you the price action." Whatever. Ben Cowan likes to say that narrative follows price. A lot of these things are are, you know, selffulfilling, self-confirming. Um, and you know, I I think that the thing that's really encouraging to me about all of this is that we had the largest um theft of any kind in human history that's been confirmed. And Bitcoin is at 70. It's almost at $78,000. It like almost didn't move really. It's like, >> what was the amount for FTX? What was the amount lost for And this amount is not lost. And I think that that's what's important is that this theft, it's not all lost. Some of it was frozen. Some of

it's still being chased down. So, it's not like it was immediately all liquidated. We could talk about those details in a minute, but it's not like 7 billion was taken and then it was liquidated, removed into cash and it disappeared. That is not what has happened. But what was the amount for FTX, John, of like capital destroyed, like 9 billion or something like that? >> I don't remember. I think Teral Luna had a market cap, which is not the same thing as value, but Teruna had a market cap of around 40 billion when it went under. I don't know how much user funds were lost in FTX. I know that the buy bit hack was a billion and a halfish somewhere around there, and that was the biggest hack. So that like this the difference between like you know a company blowing up and losing your funds

or getting hacked. Um but so this is like much bigger than the buyback. >> FTX lost over 8 billion in customer deposits and 1.7 billion in investor equity. So >> it's almost it's not quite but it's not but that was also more tremendous because it was like everybody thought you know everybody just trusted FDX and it turned out it was all a scam. So this is not there's not Binance is not a scam. You know what I mean? Like this is not what this is right. This is just like there's been a theft. So obviously it's not going to react as negatively, but I I agree with your original sentiment that it's pretty a like it's pretty amazing that it's like well the biggest theft ever. They're going to liquidate everything. Everybody's vulnerable now. And Bitcoin dropped from 80 81 to to 76 and a half. You know what

I mean? Like that's that was the damage. >> Yeah, it was going up. Bitcoin off the hyperlquid news and everything was going up. It got up to I think about 81k and then it it dropped down. But, you know, look, all we've really done here is gone and touched the 50week moving average, which is like a retest of the bull market support band. And it seems like, I mean, so far at least, the the bull market support band seems to be holding on. So, Bitcoin hasn't like totally fallen out of bed. The digital asset markets haven't totally collapsed. The bull run structure market structure isn't even broken. Um, obviously, this has been insane volatility and like I'm sure that'll continue for a while. I don't know what's >> like is this really that volatile these days? You know, just looked at it 82. It was almost at 82 yesterday morning or

yesterday early afternoon and then as the news started to break it then all it you know the bottom is like 76 or something like that. So it's like that's not you know that's not even 10%. Right. No, but for something so tremendous I I wouldn't call that volatility. I'd call that strength. I don't know. >> I would I would call it modestly bullish uh in different circumstances. Um but yeah, look I think the the volatility I'm talking about is just like it's been very hard to trade Bitcoin in these last couple months. I think that's just, you know, something that goes along with the early bull market is that there's a lot of chop. There's a lot of mixed opinions. There's a lot of bears who think that the bulls are just in a, you know, a bull trap and a fake out.

There's a lot of bulls that are a little bit too timid to take a big position, you know, and it's just part of what we're going to see anytime you switch from a bare market to a bull market. But overall, I am encouraged by the way that Bitcoin and crypto overall have have held up. I'm encouraged by Binance's response. And I do think that as we go forward, this is going to, you know, the situation will get more information on this. But, you know, I think that the the bull market is going to continue to build. This isn't going to kill the bull market in Bitcoin or crypto. >> It clearly hasn't. That's the thing is that I think it's like unless there are more of these events coming in the next couple weeks and this fabled bottom in octo in November after the midterms. If

you're listening to show on Monday, this kind of brought up that Ben C was saying and people really I think a lot of bears being like there's definitely going to be a bottom like we're going to go below 57 like just you wait. um that it's like, well, you're going to need like 30 of these to get there, right? It's like, no, but I mean that, you know what I mean? Like this, okay, that's pretty bad. Um, but it's like it it the you know, it knocked Bitcoin down by 6K, right? From 82 to 76. So, it's like that's it. So, you will need at least five more of that exact thing to get us below or whatever. It's not five. You know what I'm saying? Um, >> well, although I do want to ask you something. You were talking about Michael Sailor. Didn't the CEO of Micro

Strategy resign yesterday? Uh, I don't think it was the CEO. I think it was um someone's seuite, but yeah. >> Oh, I thought it was I thought I guess he's the CEO, right? Is he the CEO? >> Yeah, the sailor. So, who Hold on. Who's who resigned? >> Sailor's not the CEO. No, the the CEO. My >> name CFO. The CFO quit. Andrew Kang, why did he quit? >> I don't know. Ask him. >> Why would he quit now? >> All they said was there was a difference of opinion and I think, you know, they were going in a different direction. You know, who knows, right? like you can't speculate about these kinds of things.

You can guess. I mean, people will speculate about these kind of things, but I I don't know and I'm not going to speculate is what I mean to say. Um but yeah, I I don't necessarily like have a strong take on that one way or the other. There's been a lot of turnover. There's been a lot of change in leadership of a lot of um different organizations like Algrand for example brought in a new uh CEO. They've changed a lot of their seuite. Um you know, who knows? There could be a lot of different reasons for that. Maybe he found a different opportunity. Maybe he just wanted to go in a different direction. I I don't I don't really know when, but yeah, I think we should I want to hear this video from Richard Tang, man. We got to get >> It's just a weird time. It's just a

weird time for your CFO to resign is all I'm saying. Totally. Listen, seuite people move all the time. There's nothing wrong with that. It's >> That was a week ago at this point. So, yeah. >> Oh, it was really >> I think it was like the 26th of October. >> Oh, I thought I could swear that's that's 4 days ago. >> Yeah, whatever. Yeah. Okay. Okay. Okay. So, what's this? Okay. You want us to watch a video? Just tell me what the video is that you want us to watch. >> I don't know. We're going to watch it live with you guys. >> Update from Binance's co-CEO. They posted it an hour ago. I haven't seen it yet because I've been on calls all morning, but this is this is how this is going to go. We're going to get breaking updates on this as it comes out and it's

going to come from Binance. They're going to communicate. So, we'll see what he says, you know. >> Okay. So, we have this video from Richard Tang, who is the co-CEO of Binance, and he released this. We're recording. It's just about uh just after 12:30, so Eastern. So um you see my time says P specific there but yeah so he released this about 2 hours ago. So we're going to watch it and give us give our live commentary as we as we watch. >> Hi everyone. Firstly I want to thank you for the support. Difficult times like this are a great reminder how strong our industry is and we work together. We are grateful to our partners that acted quickly to freeze the hack assets to global law enforcement who are working with >> the statement. You can see his eyes.

>> But most of all, we're grateful to our users for their patience and understanding. Rest assured that we're working non-stop to resolve this to make the users whole and live up to your trust. I want to be clear, we're committed to covering all hacked losses through our company funds. Your assets are safe. The good news is that we are recovering stolen assets for users. Binance has reserved over 6.34 billion of company funds to cover the stolen assets. 5 billion of these funds are already held in exact token assets they impacted such as USDC, USDT, BTC, >> where is he etc.

>> I know many of you are asking the same question. >> I don't know but he must be like >> are not >> 24 hours. >> Let me be direct about the first point. We never use any customer funds so they are not impacted. >> What was the FTX? Got to remind everybody of FDX hot wallet. >> User assets are held under Binance established security architecture. The vast majority sits in cold wallets and are only moved into a hot wallet when a user makes a withdrawal. One more thing I want to share. Binance has always been built for the long term. Most of what we earn from day-to-day operations is held in crypto assets. Yeah, I feel like they should be paying us to roll this on the show. Like

>> this is just this is like an ad for them. >> This is like it's a commercial for Binance right now. >> Long-term value. >> Good for them. They need some they need some >> Why we able to absorb a lot of this size immediately with our own money. We working on the outstanding amount by buying the token. >> Wait, hold on. Hold on. How much money do they have? Cuz you said we can just we can just fill this back up with our own cash. So 7 billion is like just doesn't matter to them. Is that what that what you're saying? >> Yeah, basically. And I don't know how much money that Binance has or how much money CZ has, but I know they can do this. Their user funds are like the estimates are around like $160 billion of user funds. So like getting hacked

for 6 billion is a lot, but or 6.3 billion is a lot, but it's not all of their user funds. That's the point he's making is that like this is a hot wallet that was was hacked. It's not their cold source. It's not their bank, right? Like they have way more than this and it's that's all safe. So wait, which wallet is it then? If it's not their bank, like what is the wallet then that was hacked? >> It was a hot wallet. It's called Binance 14. That's what that's >> But what does it do? What does that wallet What is that? What was that wallet's purpose within Binance? >> They have to keep some of those assets liquid so that if people want to make withdrawals or exchanges or whatever they >> Okay, so it's the liquidity for those tokens like the UNI and the ETH and all

that stuff. It's the liquidity wallet for all those liquidity pool basically. >> That's what I understood from what he just said. That's Yeah, but they're not they're not finance is not Yeah. Hold on. Binance is not keeping $160 billion of client funds in a hot wallet on an engineer's laptop. >> No, that's I didn't think they were. I'm just saying so what is this? But what is this specific wallet that was vulnerable? That's more so what I'm asking, right? Is that it's like okay, I get that they have their $160 billion of money protected, but what's this wallet then >> that isn't protected? Like, you know, >> well, most of their hot wallets are protected, too. This just got compromised. That's the point is like one of their hot wallets got compromised. That's basically what he's saying. And it's uh what you know they

have to have >> one of their hot wallet. Why do they why do they have $6 billion in a hot wallet? >> Listen, man. You've got >> like I have a hot wallet and it has like 300 bucks in it and I feel unsafe. You know what I mean? Like >> you don't you don't have like half the planet using that hot wallet to make quick withdrawals and and purchases and exchanges from. So they have to keep some of their funds liquid for people to use. >> They don't have a better way to do that. Like they're like, "Uhoh, what if people want to trade some freaking UNI for some USDT?" I guess the only way to do that is to have a hot wallet. Like that's not that that to me. That's the state of crypto in 2026. We are we're doomed.

Like that is like >> the only way to have a liquidity pool of a billion dollars of UNI uh is to put on a hot wallet. >> I'm sure they're going to revisit a lot of their operational workflows around this. I'm not I I look I don't know. The other thing too, it's important to say to the audience, I don't know. LG doesn't I don't want to speak for Binance and I don't want to suggest that they don't have great operations. >> Get Richard out here, man. Richard, you're still I'm sure you're still awake, man. From wherever you are, this looks like a plane, honestly. >> They got to be exhausted. They've been working around the clock. CZ said like one of their staff is pregnant and she's been working on this around the clock.

This is like the full press by the by one of the best teams in crypto. So, good for Binance. >> Well, man, we're playing their video. We rarely talk Binance on our show, so we're they're getting Let's keep watching more this if you want. Yeah, whatever. >> No, let's watch market and OTC channels. >> We'll share more progress as soon as we can. If you as a user are concerned, we encourage you to check funds on your Binance account with our initial proof of reserve for public verification which is targeting on Monday. You can reach out to our customer service with any question.

Next, I want to give you an update on our understanding of the hack itself. Our tech and security team are still deep in investigation of the hack. This was not carried out by one person. Our initial investigation suggested that the security incident may have involved a compromised laptop. However, our subsequent investigation has uncovered additional points of breach. This was a complex attack. The attacker had also used self-destruct mechanism that destroy tooling at traces as they ran making it more difficult for us to trace and investigate.

>> That's interesting. >> Use a known multi- signature protocol EIP 7702 to obtain onchain execution approval of a hot wallet. The delegation did not pass through our normal approval controls and that's why we need to pause the withdrawal service to investigate, rebuild and retest the entire infrastructure system. So what are we doing now? First, we're rebuilding the withdrawal service and we but and we are not switching it back until it passes rigorous testing. We are very hopeful that users will be able to withdraw prior to the Sunday deadline which is on track to be within 40 hours.

Secondly, we're conducting a full security review across the entire company endpoints cloud key management signing everything. Third, we're completing the purchase of the remaining assets and will verify in our proof of reserves. by sharing a full proof of reason. >> Okay. Yes. They're buying the dip. They're buying the dip to to make it whole. >> Initial view of the proof of reserves before that. >> Fourth, we are working with law enforcement, blockchain intelligence firm, token issuers, and other exchanges to trace and recover stolen funds.

>> We'll do everything within our power to ensure that these bad actors will be held accountable. Lastly, this industry will help and we are very scared for my life. >> Partners across the entire ecosystem. >> We have moved very quickly to help and support. We this storm. Thank you for the support and stay safe. >> Thank you. Oh, stay safe. Stay bullish. They Oh my god, man. That's your >> Okay, wait. Wait. I want to say something. I want to say something. >> That's you in disguise. >> I want to say something. Hold on. I want to say something. This is important to me and I I I don't want to be queued up for this question. I want to say this in the records. I want to make sure we say this.

>> North Korea is harassing our entire industry. The Trump administration this August did something. There's something in the United States in the Constitution called letters of mark, which basically means privateeers. Um, and the Trump administration seems to be entertaining using this. Again, the entire nation state of North Korea is funding hackers to harass our industry. We don't have to take this. We have Wi-Fi, too. And they have things of value that can be hacked, too. And I am not saying that we should do anything specifically. I'm not calling for anything. But they have now like harassed our industry so much. I would like to see

>> wartime Ethereum. That's what I would like to see. I would like to see our industry defend itself against this this harassment and this threat because there's no reason why we have to take this. There's no reason why we can't defend ourselves. And there's no reason why we can't fight back. There's no reason why we have to just sit back and let them harass us for the rest of our existence. I would like to see some sort of organized effort to, you know, take take this back to North Korea and see how they do if we return fire. Um, so I I don't know. I I just I just would like to see this stopped and I would like to see somebody fight back a little bit on this because we don't have to just take this. We can, like I said, we're building castle walls. We're

going to defend. The defenders will win, but there's no reason why we can't also, you know, see what's going on in North Korea. So anyway, uh I would like to see some kind of response from our industry about this. Not just like a like we're going to review our security systems, but we're going to see what we can do to stop this threat and this attack um so that this doesn't happen ever again. But anyway, that's not my business and I'm sure they'll discuss that with law enforcement, too. You know, one of the weird things about crypto is that the longer you're in it, the more accounts you seem to end up with. You buy in one place, trade somewhere else, earn yield somewhere else, and if you actually need capital, you end up having to sell something that you probably wanted to keep. That's why we at Milkroad are

partnering with Nexo. These guys keep the whole thing under one account. You can buy, trade crypto, earn interest on what you already hold, and even borrow against your capital without having to sell it all in one spot, all in one account, all on Nexo. So, if you need liquidity, but you don't want to give up your position, or you're already holding crypto and you want to be able to do more with it, I think Nexo is worth your time. We love working with them. I think you will, too. Tell them Milk Road sent you. >> In crypto, you can get into a project long before it lists on Coinbase. In tech, the early window mostly belongs to VCs, and companies now stay private for a decade or more. Alumni Ventures, a partner of the Milkro Show, gives accredited investors a way in. Time and CB Insights both rank them as a top 20

US venture firm. You can sign up for free to see the weekly deal flow or write one check into their foundation fund for about 25 private deals. Venture is high risk and long-term though, so read the details first. Go to av.vc/milkroad. We should send you there. We should send you there. You know the Catrini analyst trade of Hormuz. Listen, this is Private John Gillan reporting for duty. Shave your head. Get your ass over there, man. Get to the get to the what is it? The demilitarized zone or whatever it is. Get your ass in there. Sneak in. Uh like in the movie The Interview, which was shot near me in Vancouver. Uh and and get your Seth Rogan and James Franco.

You sneak in there and you find that unis swap and you bring it back. All right. >> And you take what what of value are we going to take from that? What what you said? Let's take something of value from them. What is that? What are we going to take? >> Anything they have, bro? I don't know. >> What do they have? What do they have in North Korea? What do you want to get out of North Korea? >> LG, we can't talk about this on YouTube, buddy. We We're going to have to edit all these out. I like I don't know. I don't know. I'm just saying that we don't have to take this, right? Like that's that stands to reason, right? Like we don't have to just defend, we get attacked, too. And if they're going to constantly harass and attack us, you

know, they just pissed off a guy who has many, many billions of dollars. Also, I want to say this too about Binance. CZ was just here in New York on the on NASDAQ to ring the bell um for um a change of of of a rebrand and a change of leadership of uh what's now called BNB standard and be like you know a a company that's trading on on NASDAQ here. They're trying to be a legitimate business. They're trying to build um a legitimate global business and and you know just they're building something that's important and they're being harassed and attacked and people are making fun of CZ and trolling Binance on Twitter and all this other stuff and it's like we don't have to stand for this, right? We we can defend ourselves.

We should defend ourselves. There's no reason why a hostile nation state should be allowed to fund hackers to harass our industry to the end of time. And I I don't know what I'm calling for exactly. I'm not trying to call for anything. I don't want to get in trouble, but you know, whatever. But like just there's no reason why we have to take this. And they've pissed off people with a lot of capabilities, a lot of knowledge of cryptographic security and a lot of knowledge of operational security and and hacking. And they have a lot of money. So, I don't know what's going to happen with this, but there's only so far you can push people before they start pushing back. And I don't want to just be defending forever. I'd like to see somebody start, you know, taking the fight to North Korea in whatever form

that means. I don't know. But I don't see any reason why they should be allowed to fund hackers indefinitely without our country and our industry pushing back. And that's just something I wanted to say because it's important to me. And I don't think that people have to take this posture of hiding in fear that, you know, we have to either trust the banks or they're going to lie to us and exploit us and do shady business and then write it up as a business expense and oh, then we have to go tr go put our assets in crypto and just let North Korea harass us and steal from us for the rest of our lives. We don't have to live like this. Um, so I don't know. I you know you're making a joke, but like I'm actually really upset. I'm really pissed off. I'm

rooting for Binance. I'm rooting for CC. I'm rooting for crypto. And I'd like to see us defend ourselves. That's all. Do you But don't you think I got to bring back a point you said earlier though that this makes the industry stronger, right? Like I as much as yes, they're harassing us, they're also pressure testing everything. >> Yeah. >> Right. Like that's what that's what I'm saying is you have somebody actively trying to steal all these funds, trying to our up. And that's a blessing. I would say more so as much as it sucks that this stuff happens like this. You're talking about the future of finance is decentralized. It's onchain.

That needs to be rigorously tested from every possible entry point and that all people are like, "Oh, there's more hacks this year than there's ever been." And that's true. And hopefully this is the top. You know what I mean? That's like everybody's got fable now. Everyone's got all this crazy and they can find all these entry points, engineer all these ways. And hopefully that makes everybody realize that we're still super vulnerable. And if we want this to grow from whatever it is, $3 trillion, $2.5 trillion market cap to a hundred trillion market cap. You're going to need a lot of this to get there right?

>> And I think what you're describing is white >> early days of web two, man. Like people's Facebook accounts, Gmail accounts, that that stuff was hacked all the time. People would click on click on people were idiots. They'd be like, if you don't forward this email to 12 people, like all the goats are going to die or whatever. People would click on that. People click on it and forward it. You know what I mean? And that still happens. And or the Nigerian prince, you know what I mean? How many people got by the Nigerian prince? But Nigerians Nigerian prince scams for 10 years. This is our Nigerian prince era except it's way harder and it needs to happen for people to build the the digital financial literacy and also for the industry to realize what it's going to take to to for this stuff to be safe.

So I'm just I'm not giving a counterpoint. I'm just adding that it's like you're mad about it. I think the another way to look at it is that somebody's going to do this. >> So I strongly disagree. >> Somebody's going to try and steal this money and these guys these guys are are showing you how it can be done. >> Sure. So, I strongly disagree with this. I think there's a strong distinction between white hat hacking and black hat hacking. What you're describing is white hat hacking, which I think is a good thing. White hat hacking is designed to do exactly that. It's designed to pressure test and stress systems, but it's not doing it maliciously or to destroy or to steal. It's doing it precisely for the reason you're describing, which is to pressure test systems, make those security and defenses more robust and allow the

systems to improved and and adapt and and grow and evolve because they have to continue to do that because the the the landscape of risks changes too. >> Black hat hacking what they are doing is not a good thing and it should not be encouraged or spun as a good thing. um the value that they're extracting belongs to people and the it belongs to individuals who worked very very hard to get that capital. That capital is their labor. It's their time. It's their energy. It's their life force. That capital belongs to them in a very deeply personal way. Protecting it is a noble thing. And recovering it is also a noble thing. And I don't see any reason why we can't have both. We can't say as an industry we're going to make our defenses more robust, more secure. and we're going to get the value, the

capital that was stolen from the lives of the people who invested in our industry back for them if we can. And so I think that all all that can be done will be done about this. But look, I think that the thing that audience should take away from this is that number one, crypto is not broken. The the the the protocols will still continue to work. The assets will continue to function normally. They haven't been compromised. They haven't been hacked. Um we are going to learn from this. We are going to make things more robust from this. This is still evolving. It's not over. Law enforcement is still working on it. Binance is still working on it. They're going to continue to make announcements and share updates.

Um, if you do have funds on Binance, your funds are SAFEU. They're going to cover the hole. They're more than enough to do that. They're it's going to be okay. Don't panic. Don't trade on emotion. And as far as price action going, if you're looking at this being like, should I get in? Should I get out? What should I do? Just don't trade on emotion, right? Like, I think it's there's nothing wrong with just letting the smoke clear a little bit on this and then making a decision from a place of a little bit more stability and emotion and in price action. And we at Milk Road will continue to follow this as well. Um but yeah, just like be compassionate, be kind, don't make fun of people right now. And um just try to try to just learn from this as much as you can and

and support each other as we all get through this together. >> All I'm going to say on what you just said is that this is the wild west and it will be for a long time. And listen, like >> you lose money from hacks and you're scared of price action. You can feel the way you feel about those things. And it's really terrible when it happens. You know what you're getting into. You're keeping your fund. You're buying these silly internet tokens with all this promise and all this stuff. And only only in the last year or two, John, even doing the show with you, has there been real like, okay, these are becoming real things. Because before they weren't real honestly like a lot of these businesses, all this stuff it's like it

was maybe. Even a couple years back nobody talked about revenue because there was zero revenue. Only now are there businesses that actually show that they make money doing crypto things. So this is only newly a legit industry and a large parts of it the onus of it is it being open and free and with that comes you want to be outside the arms of the usual jurisdictions and institutions and government reach and all that kind of stuff. Well, you got to accept that a lot of other people are also there for the same reason and they're not going to be nice people. And I'm just saying that I'm I'm just saying that and and this is the same sentiment when people are like I you know back in the DJ days like I had a board ape for 100k and now it's down and it's like well you should know

what the you were doing because it's a brand that didn't exist 6 months ago right like it's just people cry about this stuff but it's a casino and you cannot cry here and even though we are in a the casino is starting to progress into replacing the old banking system that has been around for hundreds of years that's great but simultaneously bad things will happen in that transition you You know what I mean? It's like that you can go back. Listen, people start when did what was the first stock, right? When somebody wanted to raise money to build ships to go to the new world and get all the spice and and then did they cry when all those ships freaking crashed and everybody died? Probably. But you should have thought about the fact that you're investing in some new thing that nobody's done before and it's going to

overhaul the world economy and that's going to take a lot of time and a lot of there's going to be a lot of problems along the way. So, you know, yes, everybody has to hold each other and hug each other when these bad things happen, but it's like I don't know. To me, it's like they are going to happen. And if you want to play in this space, you got to be you got to be ready for that. Um, and you have to constantly be safe and be bullish. And what was the third one? >> Stay safe. Stay educated and stay bullish. >> Educated. Educated is the most important part. You know what I mean? You can't listen, you go on X right now, there's millions of threads you could look up today of like, oh, you don't want to get hacked. Here's exactly what you got to

do, right? And a lot of those, some of those might show programs. Do not download those programs. But otherwise, it's things like, don't use your phone as a 2FA, you know what I mean? This is basic that people still do, man. Like freaking some people, you know, you know what some people do when they go on vacation? They take a picture of their written down passwords in their phone and they take that with them, you know, and that's like a normal thing. So many people don't use password managers, right? There's so many people out there don't do that and that's just that's just for the normal bank accounts. So in crypto, you know, there's a long way to go for this stuff and um I feel bad when these things happen, but at the same time, I don't know. I to me it makes me

more bullish that it's like everybody needs to learn from this and there's going to be some collateral. Yeah, that's right. LG's got things to say today. Uh anyways guys, uh we're going to wrap this up. For people that are still listening at this point, um I do have some um not sad news, but uh news that you will not hear from me for a while. Um uh the LG the LG family is is producing another member. And uh I will not be doing the shows with John on Mondays for u at least a few weeks, if not a couple months, uh while we take care of that. So um you know, you won't hear from LG on the on the crypto show for a while. I'll still be on the stocks channel right up until the deadline. Uh but then I'll also be off there. So uh

thank you guys for listening. Uh, and John, you know, you're on your own now, so smooth sailing. Smooth sailing as we bought him in November. >> Well, thank you, LG. I'm very happy for you and your family. I'm going to miss you a lot, but I'll I'll be in touch with you and uh I'm looking forward to having another episode with you again in the future. >> I'll text you at 3 in the morning. All right. You'll be getting texts from me at 3 in the morning about about how much how much unis swap we're going to buy. Um, all right. Thanks, John. And uh you guys have a great weekend. Stay safe, stay educated, stay bullish. Uh and uh don't cry. Goodbye. Thanks for listening to Milk Road. If you enjoyed the show, make sure you like and subscribe. And if you're struggling to find winners in the market, that's

exactly what Milkroad Pro is built for. Our analysts have called some of the biggest winners early, and Pro lets you see what they're buying next, every trade they make, and the research behind every position. Check out Milkroad Pro at the link below. Everything you hear on Milkroad is forformational purposes only. These are our personal opinions, not financial advice, and we may own some of the investments we talk about. Always do your own research and make the decisions that are right for you.