Binance Suffers $6.3 Billion Hack, Pledges to Cover All User Losses

The world's largest cryptocurrency exchange, by means of both users and trading volume across the board, has been hacked. Binance confirmed the incident but reassured that user funds will be covered in full.

According to the exchange's investigation, the incident "may involve a compromised DevOps engineer's laptop, which allowed an attacker to gain access to a service container and submit unauthorized withdrawal transactions." Binance further revealed that they haven't found any private key leak.

Immediate Impact

The exchange revealed that the total impact sits at around $6.3 billion. Together with multiple service providers and blockchain partners, they've managed to freeze about $3 billion on-chain at the time of the announcement.

We will share a detailed technical post-mortem once the investigation is complete and the facts are fully verified. The estimated total impact sits at around $6.3B. We have worked with blockchain partners to freeze affected assets, with ~$3 billion frozen on-chain so far.

User Protection Measures

Both the official X account of Binance and Yi He confirmed that users needn't worry about their funds and that the firm will cover all losses from the SAFU fund, as well as the company's own funds.

As immediate precaution, Binance has temporarily suspended deposits and withdrawals while security checks are completed, revoked the affected address authorization, and engaged law enforcement and blockchain intelligence partners to trace and recover funds.

Market Reaction

The news immediately impacted the market, with Bitcoin dropping from above $81,000 to around $76,400 as the situation was unfolding. Altcoins also sold off, with the entire market trading in the red since the news broke.

Data from Coinglass shows that the total liquidations on the derivatives market reached around $1.5 billion. Many in the industry expressed optimism about relatively modest declines amid what has become the largest hack in recent years affecting the biggest crypto exchange.