Binance Covers $6 Billion After $6.3 Billion Crypto Hack Linked to North Korea
Details and Aftermath of the Binance Crypto Hack
Overview of the Hack and Immediate Response
Oct 31 (Reuters) - Binance, the world’s biggest cryptocurrency exchange, said it has covered $6 billion of the $6.3 billion stolen from its platform by using company money to buy replacement tokens, after a hack that US officials said was carried out by a North Korean state-sponsored unit known as TraderTraitor.
"We had already covered $6B of the impacted amount of the hacked loss," Binance said on X on Saturday, after saying earlier that it had covered 90% of the stolen funds.
The remaining amount, now less than 10%, consists of assets that are less liquid and may take longer to source in the required amounts, according to Binance.
Attribution to North Korea and Law Enforcement Involvement
The US Federal Bureau of Investigation (FBI) said on Saturday the North Korean state-sponsored unit known as TraderTraitor was responsible for the attack.
North Korea has for years denied using state-linked cyber units for espionage, financial theft and revenue. Its mission in Geneva and embassy in China did not respond to requests for comment.
Members of the unit were observed by law enforcement converting stolen assets into the cryptocurrency ethereum, the FBI said in a statement, adding that it expects "further laundering" of the assets through the use of related technology.
Analysts had previously blamed North Korea and said it could be the largest financial heist of all time.
Binance’s Recovery Efforts and Financial Impact
Freezing Assets and Reassuring Customers
Binance has been working with industry partners to freeze some of the affected assets, with about $3 billion located as of Friday.
The company has repeatedly said it would bear the financial impact of the funds stolen in the hack.
Sources of Recovery Funds
The money spent re-buying tokens came from using part of its $1 billion Secure Asset Fund for Users (SAFU), a bitcoin reserve it holds to protect customers in the event of security breaches, as well as some of its Futures Insurance Fund, and the company's own corporate treasury, it said on X.
Co-CEO Yi He said on Saturday that 50% of its SAFU funds would be used, while the company said it was committing to replenishing the fund to return it to about $1 billion.
Impact on Crypto Market and Customer Withdrawals
Crypto prices fell on Friday, while Binance sought to reassure customers that their funds were safe after the hack.
Co-CEO Richard Teng had said that the breach was a "complex attack" involving a compromised laptop and malicious software designed to delete evidence of its activity, making it harder to trace and investigate.
After the hack, the exchange stopped allowing customers to withdraw their funds, but it said on Saturday it was still on track to reopen withdrawals on Sunday.
Withdrawals were not open as of 02:50 GMT on Sunday.
Ongoing Measures and Proof-of-Reserves
Binance said it has set aside around $6.34 billion of company funds internally to cover the losses.
Binance also said it had taken a new snapshot of assets held on its platform as of 0000 GMT on October 31, as part of its proof-of-reserves process.
Users holding the 10 listed tokens — BTC, ETH, USDT, BNB, SOL, USDC, XRP, USD1, RLUSD, and ZEC — would be able to verify that their assets were backed at a minimum ratio of 1:1 once the full proof was available, it said.
(Reporting by Angela Christy and Shubham Kalia in Bengaluru; Elizabeth Howcroft and Max Cherney; Editing by Jan Harvey, Sergio Non and Paul Simao)
