Binance covered 95% in losses following a hack amounting to $6.3 billion - UkrMedia News
Binance, the world's largest cryptocurrency exchange, has announced it has covered 95% of losses from a $6.3 billion cyberattack, using its own funds, futures insurance fund, and SAFU reserves.
On Sunday, 1 November, the exchange began a phased resumption of cryptocurrency withdrawals after covering approximately 95% of the massive losses. The company utilized its own funds, the futures trading insurance fund, and the SAFU reserve fund to replenish reserves and fully compensate clients for their losses.
Funding Sources
Binance drew on three sources of funding to cover the $6.3 billion in losses. Firstly, the exchange used its own corporate reserves to begin purchasing the stolen cryptocurrencies. Secondly, it utilized part of the Futures Insurance Fund, which typically covers risks when closing out positions on the futures market. The third source was the Secure Asset Fund for Users (SAFU), a special reserve established in 2018 to protect users during emergencies.
The company stated that it had raised only part of the funds in excess of the required level for the fund.
Asset Recovery
Full support has been restored for ten cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Tether (USDT), BNB, Solana (SOL), USD Coin (USDC), XRP, USD1, RLUSD, and Zcash (ZEC). The remaining 5% of losses relate to less liquid digital assets that are more difficult to acquire in large volumes without significantly affecting their market price.
Binance continues to purchase the necessary tokens both on the open market and through over-the-counter transactions with major counterparties. The company insists that the financial consequences of the attack will not be passed on to users.
Investigation Findings
On 31 October, the US Federal Bureau of Investigation stated that the North Korean hacking group TraderTraitor was behind the attack. According to the FBI, members of the group have begun converting some of the stolen assets into Ethereum for subsequent money laundering via decentralised financial services.
Co-CEO Richard Teng reported that the attackers may have gained access to internal systems via a compromised employee's laptop, with signs of malware being used to cover their tracks. Blockchain analytics experts estimate the hackers withdrew the bulk of the funds in around 20 minutes.
Binance is working with law enforcement agencies and other crypto companies to track down and freeze the stolen funds. As of 30 October, the whereabouts of assets worth approximately $3 billion had been established, though tracing these funds doesn't guarantee their return to the exchange.
Related
