Here’s what happened in crypto today
Today in crypto, the US Treasury moved to cut MEXC off from the US financial system over alleged illicit transactions, questions remain about Binance’s hot wallet safeguards following its $6.3 billion hack, and other crypto exchanges are disclosing their cold storage reserves to reassure customers.
US Treasury cuts off MEXC over alleged $16B in illicit transactions
The US Department of Treasury on Friday issued an order to cut cryptocurrency exchange MEXC Global off from the US’ financial system after accusing it of facilitating at least $16 billion in transactions linked to sanctions evasion, cybercrime and other illicit activity.
The Treasury’s Financial Crimes Enforcement Network (FinCEN) asserted that MEXC handled transactions involving sanctioned groups in Iran, Russia and North Korea between May 2021 and May 2026. This included around $1.5 billion in transactions linked to Russian sanctions evasion, according to the official press release.
The order effectively bans US financial institutions from processing money transfers involving MEXC and will take effect 30 days after it is published in the Federal Register.
“Financial institutions cannot have it both ways: Either you support the Iranian regime, or you have access to the U.S. financial system,” said Secretary of the Treasury Scott Bessent. “Treasury will continue to sever the Iranian regime’s economic lifelines and thwart its desperate attempts to circumvent U.S. sanctions using digital assets.”
The action is part of Operation Economic Outcast, a US Treasury campaign launched in August with aims to cut off financial entities that help Iran evade sanctions.
According to DefiLlama, the exchange held about $4.48 billion in total assets as of Friday. Cointelegraph contacted MEXC for comment but had not received a response by publication.
Binance’s $6.3B hack leaves questions over hot wallet safeguards
Binance’s $6.3 billion security incident has left unanswered questions about how the exchange managed its hot wallets and limited the amount attackers could access.
Binance co-CEO Richard Teng said on Oct. 30 that the attack affected the exchange’s own hot wallet. Most customer assets were held in offline cold storage and moved to hot wallets only when users requested withdrawals.
Wallet balances offer only a partial picture of an exchange’s exposure to an attack. Public blockchain records can show funds moving but cannot establish the internal controls governing those transfers, CertiK analyst Jonathan Riss told Cointelegraph.
In its initial report Tuesday, Binance said attackers accessed an internal wallet-signing service to move funds outside its normal withdrawal process. Binance said some technical details would remain confidential to prevent further attacks.
Crypto exchanges tout cold storage ratios after Binance attack
Crypto exchanges were quick to reassure users following the attack on Binance’s hot wallet infrastructure last week, with several companies disclosing how they divide assets between cold storage and internet-connected hot wallets this week.
Crypto exchange Gate on Thursday launched a “Proof of Security” (PoSEC) framework, reporting that 88.26% of its total assets were in cold storage and 11.74% in hot wallets. It claims its cold storage could cover 104.58% of customer assets even if its hot wallets were completely drained.
“By publicly disclosing the distribution of assets between platform cold storage and hot wallets, PoSEC provides visibility into asset storage structures and their ability to cover potential losses under extreme scenarios,” Gate said. It noted the data is still undergoing independent review by a third-party audit firm.
Threat actors attacked Binance’s hot-wallet infrastructure last week, stealing approximately $6.36 billion, most of it in about 20 minutes, according to TRM Labs. Binance CEO Richard Teng said the “vast majority” of user assets are held in cold wallets, but the company has not provided a precise split.