The former Bank of England deputy governor says early regulation matters as digital assets edge towards the mainstream, while the FBI blames North Korea for the largest crypto theft on record
Sir Jon Cunliffe, the Bank of England’s former deputy governor, has said Britain needs “guard rails” for cryptocurrency following last week’s $6.3bn hack of Binance, the world’s largest crypto exchange. He argued that the technology is growing and will move closer to the mainstream banking system. Binance is not authorised or operating in the UK, and Sir Jon said the mainstream financial system could not yet be destabilised by a crypto hack of this kind. The FBI has formally attributed the theft to North Korea.
‘Difficult to retrofit regulation’
Sir Jon pointed to social media as a warning. “We are seeing with social media platforms how difficult it is to retrofit regulation if you don’t actually put the guardrails in early on,” he said. He stressed that “we were not yet” at the point where a crypto failure could threaten the wider system.
Britain’s new cryptoasset regime is due to start on 25 October 2027, under regulations made on 4 February 2026. The Financial Conduct Authority (FCA) opened applications on 30 September, and firms have until 28 February 2027 to apply. Existing anti-money-laundering registration will not automatically cover the full range of newly regulated activities, and the rules can apply to firms serving UK customers from abroad. Binance’s own UK website says its crypto services are not covered by the Financial Services Compensation Scheme.
North Korea blamed
Analytics firms TRM Labs and Chainalysis say North Korea’s state-backed Lazarus Group is the most likely culprit, with one calling it “a highly sophisticated and well-planned attack”. The FBI said on 31 October it was the work of TraderTraitor, a North Korean state-sponsored unit, and that the stolen money is mainly being converted into Ethereum. The same state was blamed for the previous record, a $1.5bn hack of the Bybit exchange in 2025. TRM Labs estimates North Korean hackers have stolen about $12.8bn in crypto since 2017, the Washington Post reported.
The FBI, Secret Service and IRS Criminal Investigation have asked blockchain firms, exchanges and other service providers to block transactions linked to the laundering wallets. There have been no arrests, and the missing funds have not been recovered.
Isabella Chase, head of policy at TRM Labs, told BBC Radio 4’s Today programme the hack was so sophisticated it would have taken months to plan. She said it appeared a developer’s laptop was targeted, giving the attackers the approvals to take the funds out in 20 minutes. About $3bn has been frozen, she said, but North Korea “may profit from a potential $2.4bn”. Ms Chase added: “They have to finish laundering it in crypto then move it into the real world, then into the traditional banking system to turn it into cash they can use for their nuclear weapons programme – so they will make considerably less.”
TRM researchers told WIRED the attackers made small test withdrawals, and that attack code was deployed and tested at least 36 hours earlier. At least ten blockchains were involved. Binance says it has found multiple points of compromise and no evidence that wallet private keys were leaked. Co-chief executive Richard Teng told Reuters malware tried to erase evidence.
Binance’s response
Binance said on Sunday that withdrawals would reopen in phases between 6am and 9am GMT, starting with 15 networks including Bitcoin, Ethereum and Solana, and warned of possible delays. It says it has now replaced about 95% of the stolen assets, up from 80% on Friday and 90% on Saturday, and that ten major tokens are fully backed. That is the exchange replacing assets from its own resources, not recovery from the hackers.
It plans to publish independently verifiable reserve proofs by Tuesday 3 November, and to refill its roughly $1bn Secure Asset Fund for Users, partly from its futures insurance fund.
