Changpeng Zhao, the co-founder of Binance widely known as CZ, has warned that artificial intelligence is making cyberattacks easier to carry out across the entire financial sector, with banks and traditional institutions facing the same exposure as cryptocurrency companies. His comments come just days after Binance disclosed a security breach that produced losses of approximately $6.3 billion, one of the largest thefts in cryptocurrency history.

In a recent interview with Yahoo Finance Executive Editor Brian Sozzi, Zhao said the advancement of AI tools is empowering hackers to analyze software more effectively and uncover vulnerabilities that would previously have been difficult for humans to detect. That heightened capability, he argued, poses a serious challenge for companies striving to protect their systems against increasingly sophisticated threats.

"There's no 100% security," Zhao said, noting that every crypto platform, wallet service, bank, and financial institution faces the possibility of an attack. He added that AI is improving attackers' ability to find security gaps while defensive systems have not advanced at the same pace.

"AI is just making hacking so much easier now, and the AI so far has not made defence a lot easier," he said.

According to Zhao, AI can now analyze code and search for bugs more comprehensively than human security teams could previously manage. He believes the global financial system must respond by deploying the same technology to strengthen its own defenses. "The whole global financial system needs to catch up on the AI defence, and we have to use AI as well," he said.

Zhao's remarks followed a significant security breach at Binance that resulted in unauthorized withdrawals from the exchange's hot wallets — internet-connected wallets used to process customer transactions. In a statement on October 30, Binance said its initial investigation suggested a potential compromise of a DevOps engineer's laptop, which may have enabled an attacker to access a service container and execute unauthorized withdrawal transactions. The exchange said additional vulnerabilities were identified as the investigation continued, though it found no evidence that wallet private keys were compromised.

The company estimates the incident led to losses of around $6.3 billion. Binance assured users that the losses would be covered through its Secure Asset Fund for Users (SAFU) — an emergency insurance fund the exchange established in 2018 — and corporate reserves, and has set aside more than $6.34 billion to address the affected assets. The exchange is also working with law enforcement and blockchain partners to trace and freeze the stolen funds; according to its update, roughly $3 billion had already been frozen on-chain. With about half of the estimated losses still outstanding, progress on tracing the remaining funds is a key detail to follow as the investigation continues.

During the interview, Zhao said withdrawals had been reinstated and that the platform was functioning normally, emphasizing that users would not incur any losses because the company is committed to covering the financial impact.

Although Zhao is no longer managing Binance — he stepped down as the exchange's chief executive in November 2023 — he closely monitored the situation as it unfolded and used his public platform to reassure users about the safety of their funds. He highlighted that the exchange followed its established response plan, which included containing the breach and keeping users informed throughout the process.

Zhao views the incident as a warning that even major financial platforms cannot take their security for granted. As technology advances, the risk of cyberattacks grows, particularly as hackers acquire better tools for finding flaws in complex software. His comments urge banks and financial institutions to strengthen their cybersecurity strategies rather than relying solely on traditional protections, and suggest these institutions may need to adopt advanced tools to spot vulnerabilities and monitor suspicious activity.

Zhao stressed that the issue is not confined to cryptocurrency companies; banks and the broader financial system share the same risks. The breach has also raised questions about the security of centralized cryptocurrency exchanges, which hold significant customer assets and depend on digital systems for transactions and withdrawals.

Although Binance has committed to covering the losses, the incident underscores the financial and reputational damage a successful attack can inflict, even when customers are ultimately kept whole.