Recent Disruptions to Global Banking
In 11 days, banks froze and millions of accounts became unreachable. Binance, the largest crypto exchange, was robbed at the same time. The incidents differed in cause.
In Felix's view, a Paraguayan bank called Weno broke the rules. It had lent far too much to companies connected to its owners. The central bank stepped in and shut it down.
The moment it did, 3 million customers were frozen out. Cards and cash machines stopped working at once.
The 3 million frozen accounts represented about 6 in 10 adults in the entire country.
Binance, the biggest crypto exchange, lost 6.3 billion dollars. The theft is described as the largest in crypto history. American authorities blamed North Korea.
Binance covered its users from its own shareholder profits rather than depositor funds. Shareholders, in effect, bailed out crypto depositors.
In South Korea, 37 financial firms were hit and almost half a million records were compromised.
How the hacks got in: shared plumbing, outside suppliers
In Japan, 128 shinkin institutions (small local savings lenders) went dark in a single afternoon on 6 November. All 128 shared one computer system. It served as the master ledger for every account at all 128 institutions.
A piece of communication equipment broke, and the failure hit 3,400 branches and cash machines at once. Shared infrastructure meant that a single fault propagated to every institution on the network simultaneously.
Two accounts at two institutions on the same system offered no backup against that failure. Each lender carried separate branding but ran on the same ledger. The ledger behind all 128 was identical.
In France, the bank Felix refers to as Mutualia lost about 100 million euros. The hack came through an outside company the bank worked with.
The bank warned 5.8 million customers. Criminals had enough stolen information to target them with fake calls and messages.
A secondary risk follows the initial theft. Hackers use the stolen personal information to target individuals. The stolen records gave criminals what they needed to impersonate the bank by phone and by message.
Criminals in France also broke into the system that runs supermarket fridges. They turned them up towards 50 degrees Celsius to spoil food in hundreds of stores.
The IMF and central bankers sound the alarm
The IMF for the first time ranked cyber attacks as the top risk to the entire financial system. The ranking applied to the system as a whole, not to any single institution.
As Felix puts it, everybody depends on the same digital plumbing. A tiny handful of tech suppliers serve all of it. Attackers now have AI, which makes hacking faster.
IMF head Cristina Georgieva issued a blunt warning. She warned that if people stop trusting their banks, they will go back to keeping cash in shoe boxes under the bed.
The finance chiefs of the G7 agreed to rehearse an AI attack on the banking system. The G7 agreed to the drill because its members consider such an attack possible.
Reuters and the Financial Times reported the planned drill in October 2026.
Digital dollars and the built-in off switch
Felix argues that a law he calls the Genius Act takes effect on 18 January. Any company issuing digital dollars must be able to freeze them on a government order.
Under that rule, every digital dollar would carry a freeze mechanism from the day it is issued.
Cyber security stocks and the paradox of falling prices
The biggest cyber security firms saw their shares fall. The drops came in the same week the hacking wave broke out. Palo Alto and CrowdStrike each dropped about 17 per cent.
The fall did not reflect weakening demand. A rival reported slowing growth, and the disappointment tarred the whole sector.
The decline coincided with a wider sell-off of tech stocks after elections. The shares were expensive to begin with, priced so high that any disappointment would trigger a sharp drop.
Felix argues that banks and governments are about to spend more on security after these 11 days, not less.
Japan's big bank shares fell about 6 per cent the day the shinkin banks went dark. The decline reflected interest rates and nervousness after elections, not the outage itself.
Deposit insurance and structural concentration
US deposit insurance covers up to 250,000 dollars per person, per bank, per type of account.
In Paraguay, the government guarantee paid back only up to a cap. For many savers, that cap was a small fraction of what they had deposited.
Japan's 128 shinkin banks ran on one computer system, and a single equipment failure froze 3,400 branches at once. In Paraguay, 3 million accounts remained frozen regardless of the guarantee. Depositors within the insured limit still could not withdraw a single guaraní.