On Sunday, Binance resumed withdrawals just three days following a staggering $6.3 billion hacking incident. The cryptocurrency exchange announced that it has utilized its own funds to compensate for approximately 95% of the lost digital currency, while the FBI has attributed the theft to North Korean hackers.
This reopening marks a significant test for whether users will return after the unprecedented crypto theft, which caused a sharp decline in the values of numerous key cryptocurrencies on Friday. Binance indicated that the resumption of withdrawals would happen gradually, contingent on the security validations of each blockchain. “Getting withdrawals back online is a crucial step, but our responsibilities are ongoing,” the exchange stated.
Bitcoin (CRYPTO: $BTC) was the first blockchain to reopen. By 5 a.m. Eastern Time, Binance had also reactivated withdrawals for ether (CRYPTO: $ETH), BNB (CRYPTO: $BNB), XRP, Dogecoin (CRYPTO: $DOGE), Base, and Optimism. The initial phase encompasses assets across 15 different blockchain networks. The exchange mentioned that it will “restore more assets and networks in subsequent phases as security protocols are verified.”
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Binance conveyed that it has procured replacement tokens through both market and over-the-counter transactions, utilizing resources from its Secure Asset Fund for Users, its futures insurance reserve, and its corporate treasury. Co-CEO Richard Teng disclosed that the firm has allocated over $6.34 billion in total, while co-CEO Yi He noted that around half of the user-protection fund would be utilized and subsequently replenished to approximately $1 billion, as reported by Reuters. Coverage improved from roughly 80% to 90%, and eventually to 95% in ongoing updates, with the remaining shortfall relating to less liquid tokens. Binance affirmed it will absorb these losses rather than passing them onto users. Additionally, it has collaborated with industry partners to freeze about $3 billion of the stolen digital assets, having taken a proof-of-reserves snapshot on October 31, with plans to share the full report by November 3.
The FBI reported on Saturday that North Korea is responsible for the theft of more than $6 billion in virtual currencies from Binance, which occurred around October 29. This confirms earlier speculations from private investigators. The FBI linked the TraderTraitor group, also associated with the $1.5 billion Bybit theft in February of last year, to the hacking incident. They are believed to be converting the stolen assets into Ethereum and may launder the funds further using decentralized finance and instant swap platforms. The bureau has urged private firms to block any transactions with addresses related to this laundering effort.