Cybersecurity Firms Prepare to Fight AI with AI After Black October

Binancians are losing loyalty fast. Users pulled a net $4.72 billion off the exchange as Binance raced to reassure its users it won’t leave them holding the (empty) bag. Co-founder Changpeng Zhao posted on X that the exchange is covering 100% of losses with funds from its own balance sheet.

Zhao also wrote on X that “No tech is 100% secure,” a less reassuring admission. As crypto quakes in the aftermath of its biggest-ever breach, it could be cybersecurity firms’ time to shine. Deutsche Bank analysts expect AI to create more need for cybersecurity firms like CrowdStrike, which the bank upgraded yesterday. 

Black-Hat Halloween

Cybercrime costs victims around the world $1.24 trillion annually, Comparitech estimated, and the US is hit the hardest with a $139 billion share of the total losses. Hackers could get even more ambitious as they test the boundaries of AI’s nefarious uses. 

CrowdStrike last week ID’d a China-based group known as Vapor Panda deploying an AI program to simultaneously probe vulnerabilities across organizations including semiconductor companies and governments. The AI tool was used to scope out attack paths at more than 200 organizations.  

Then came the Binance hack, which was the grand finale of a cybercrime spree dubbed “Black October” and could be a harbinger of future AI-fueled crime:

• The group the FBI is blaming for the $6.3 billion hack of Binance, North Korea’s “TraderTraitor,” has stepped up its crime-game by adding AI to its arsenal, Bloomberg reported. AI is helping the group identify high-value targets and from there, the new tech is making it easier and faster to carry out attacks. 
• The group made off with $3.3 billion worth of crypto from Binance after stablecoin issuers froze $2.9 billion. Getting away with that much is a feat TraderTraitor is thought to have achieved by automating thousands of transactions, rapidly laundering its crypto haul across complex networks. How much of a hand AI had in this part of Binance’s hack is up for debate — blockchain analytics firm Elliptic thinks the laundering was the handiwork of traditional software, not AI agents.

Two Can Play: Black October saw multiple hacks rock people’s confidence in cybersecurity. But cybersecurity firms have new AI tools to fight back against breaches, too. CrowdStrike on Monday expanded its partnership with CoreWeave, with a focus on strengthening its AI toolset.