Binance Reopens Withdrawals After $6.3 Billion Hack Blamed on North Korea

The Binance logo — Image via Wikimedia Commons

The world's largest cryptocurrency exchange, Binance, has resumed customer withdrawals days after hackers drained about $6.3 billion in digital assets in what analysts say could be the biggest financial robbery ever, according to Reuters.

The hack

• The FBI said in a cyber alert dated October 31 that North Korea's TraderTraitor hacking group was behind the theft of more than $6 billion in virtual assets from Binance on or about October 29.
• The Wall Street Journal reported the breach surfaced around 4:20 p.m. ET on October 29, when Binance's security team detected unauthorized withdrawals exceeding $1 billion; losses passed $6 billion within about 20 minutes.
• U.S. President Donald Trump said on Saturday that it remained unclear whether North Korea was involved: "We don't know if it's North Korea — but if it is, we'll talk to North Korea about it."

The recovery

• Binance says it has covered about 95% of the stolen assets, spending company money to buy replacement tokens rather than passing losses to users.
• The exchange has set aside around $6.34 billion from its corporate treasury, its Secure Asset Fund for Users (SAFU) and its futures insurance fund; it plans to replenish SAFU to about $1 billion, according to Reuters.
• A full cryptographic proof of reserves is expected by November 3.

Withdrawals return in phases

Binance reopened withdrawals in stages beginning Sunday, November 1, prioritizing bitcoin, ether and major stablecoins across 15 blockchain networks, with more networks to follow after security checks. Reuters reported customers pulled about $3.64 billion — 2.1% of assets — in the initial rush, though outflows were stabilizing. Bitcoin traded above $78,000 on Monday after hitting a six-week low on Friday.

Context

Binance has 335 million registered users globally and $171 billion in assets under management as of October 28, according to Reuters. Whether customers keep their money with the exchange now becomes the industry's most-watched trust test.