Binance says it has $6.34 billion ready to cover hack losses

Binance has allocated $6.34 billion in its own funds and reserves to cover losses stemming from an earlier security breach, the exchange said in a statement on Friday.

The exchange was hacked on Thursday, with investigations and recovery efforts alongside law enforcement ongoing. It pegged the loss at $6.3 billion.

According to the statement, Binance is holding about $5 billion of the committed funds in the same digital assets that were affected. The exchange did not specify the tokens, but Blockaid, while flagging the incident earlier, said that it was investigating billions in outflows from Binance hot wallets across Ethereum, Arbitrum, and Avalanche.

The exchange is buying the remaining roughly $1.3 billion in tokens through market and over-the-counter channels. However, it cautioned that the process could take longer because of thin liquidity and settlement delays.

Meanwhile, the reserve does not include approximately $3 billion in assets that Binance says industry partners have frozen. Tether CEO Paolo Ardoino separately said the stablecoin giant froze over $1.57 billion in USDT, while Circle confirmed more than $800 million in USDC had been frozen.

Ripple "promptly" froze roughly $200 million in associated funds, co-CEO Yi He said. World Liberty Financial also worked with BitGo and other partners to freeze approximately $27 million in stablecoins and $2 million in its own tokens, according to an X post.

What happened? 

In an earlier statement on Friday, Binance co-CEO Richard Teng said the initial investigation pointed to a compromised DevOps engineer's laptop, which gave an attacker access to a service container used to submit unauthorized withdrawal transactions.

Teng noted that the incident involved a more complex process than simply exploiting one employee's permissions. Binance has found no evidence of a wallet private key leak.

"Your money is safe, and we're covering every loss," Teng wrote.

The exchange has also suspended withdrawals, but users can still deposit assets, the co-CEO said.

Blockchain intelligence firm TRM Labs said several elements of the attack resemble previous incidents linked to North Korean hackers, including last year's $1.5 billion Bybit breach. Binance has not attributed the incident to a particular group.

TD Cowen said the breach exposed risks in exchange custody and cybersecurity, but did not undermine the underlying utility of digital assets or blockchain networks.