It’s very shocking news for crypto enthusiasts that the digital bank got hacked. Early reports indicate that Infini neobank lost $49.5 million. Let’s learn more about this banking system!
What Are Neobanks and How Do They Work?
Neobanks are digital banks that operate without any physical branch. You can access them through mobile apps or websites. So, it makes banking faster and more convenient. One benefit of this banking is that they often offer lower fees and higher interest rates.
These digital banks are great for people who prefer online money transfers. They offer basic services like checking and savings accounts. Moreover, you can access your money anytime without visiting a bank. However, most neobanks don’t have banking licenses. Therefore, some people also worry about security and regulations.
Infini Neobank Hack: How Did It Happen?
In February 2025, Infini, a digital bank based in Hong Kong, lost about $49.5 million in a security breach. The issue came from a former developer who still had access to the bank’s system. This person used their old permissions to take money from the platform without authorization.
The hacker transferred the stolen money into another cryptocurrency. Then, he bought 17,696 Ethereum (ETH), which has a worth of $49 million. To recover the stolen money, Infini offered the hacker 20% of the funds. This was applicable if they returned the rest within 48 hours. If not, they threatened legal action.
The Dark Side of Neobanking: Insider Exploits and Data Theft
Neobank security is a growing concern in the crypto world because these banks operate entirely online. Unlike traditional banks, neobanks use Blockchain, smart contracts, and online systems to handle money. It can be vulnerable if not secured properly. One major risk is that it has an insider threat. For example, the developer uses private data to hack the system.
Why Are Neobanks More Vulnerable to Hacks?
Complexity of Smart Contracts
Smart contracts help neobanks automate transactions. They make things faster and more transparent. However, they also have some risks. For instance, a small coding mistake can give the hacker a way that leads to a huge financial loss.
One big problem is that smart contracts can’t be changed easily. Many neobanks also rush to release new features without proper security checks. This makes them even more vulnerable.
Decentralized Nature
Neobanks do not rely on a central authority like traditional banks. However, it comes with some risks. For instance, if someone loses their password or private key, their money could be gone forever. And they won’t be able to get it back. Another issue is that hacks and frauds are harder to track. Traditional banks usually refund stolen money. But, neobanks do not offer such protection.
Rapid Innovation vs. Security Lags
To stay ahead, neobanks always introduce new features. This rushed innovation often sacrifices security. Hackers take advantage of security gaps when companies release new products without enough testing. Cybercriminals always look for such weak spots. So, if the features are not properly checked, they benefit from them.
Attractiveness of Crypto Assets
Neobanks that deal with cryptocurrencies are a big target for hackers. Crypto transfers are fast and cannot be reserved. That’s the reason that it’s not possible to track the stolen money. Hackers use different tricks to steal money, such as phishing, malware, and security loopholes.
When they stole money, they transferred it immediately to another account. This makes it even more difficult to track the money. Neobanks need more advanced security systems to protect the assets of their users.
Conclusion
The Infini neobank incident is a crucial reminder for both users and the fintech sector. It underscores a significant security vulnerability – specifically, how a former developer retained access to the system. To avert similar breaches in the future, neobanks need to adopt strong security protocols, such as multi-factor authentication and ongoing monitoring for any unusual activity.
