By DAYO ADESULU
Binance has set aside $6.34 billion in company funds to cover losses arising from a major security breach, with $5 billion already secured in the exact cryptocurrencies affected. The cryptocurrency exchange says it is working to acquire the outstanding $1.34 billion through market purchases and over-the-counter transactions.
Global cryptocurrency exchange Binance has announced that it has secured $5 billion in digital assets towards covering losses resulting from a major hacking incident, leaving another $1.34 billion to be raised to complete its $6.34 billion recovery commitment.
The company disclosed this in an update to users, explaining that it had reserved more than $6.34 billion of its corporate funds to cover the affected assets and ensure that customers do not bear the financial consequences of the security breach.
According to Binance, the $5 billion already secured represents cryptocurrency holdings in the exact tokens affected by the incident, including Bitcoin (BTC), Ethereum (ETH), BNB, USDT and USDC.
Consequently, the outstanding amount stands at approximately $1.34 billion, which the company says it is working to acquire through cryptocurrency market purchases and over-the-counter (OTC) transactions.
However, Binance has not disclosed the total value of cryptocurrency stolen in the attack or confirmed how much of the stolen assets investigators have physically traced or recovered from the hackers.
The $5 billion figure therefore represents funds secured by Binance to cover the losses, not necessarily cryptocurrency recovered directly from the attackers.
How Much Has Binance Secured and How Much Is Outstanding?
The latest financial update provides the following breakdown of Binance’s commitment:
- Total company funds reserved: $6.34 billion.
- Funds already secured in affected cryptocurrencies: $5 billion.
- Outstanding amount: $1.34 billion.
- Percentage already secured: Approximately 78.9 per cent.
- Percentage outstanding: Approximately 21.1 per cent.
This means Binance has already secured nearly four-fifths of the amount it committed to make affected users whole.
The remaining $1.34 billion represents the balance the company must acquire to complete its financial commitment.
Binance said it would provide further updates as it completes the outstanding purchases and verify its holdings through a Proof of Reserves report.
Binance Assures Customers Their Funds Are Safe
Addressing concerns about the security of customer deposits, Binance insisted that the incident affected its corporate hot wallet rather than customer funds.
The company explained that it does not use customer funds for its business operations or investments.
According to the exchange, most customer assets remain in cold wallets, which are kept offline and away from direct internet exposure. Only the required amounts move into hot wallets to facilitate customer withdrawals.
Binance said this established security arrangement helped protect customer holdings despite the breach involving its own hot wallet infrastructure.
The company also promised to absorb the financial losses using its corporate funds rather than transferring the burden to customers.
“We are committed to covering all hacked losses through our company funds. Your assets are safe,” Binance stated in its message to users.
It also expressed appreciation to industry partners, law enforcement agencies and cryptocurrency platforms that responded quickly to help freeze the affected assets.
How Hackers Gained Access to Binance’s Hot Wallet
Meanwhile, Binance has provided additional details about the sophisticated cyberattack, revealing that its investigation uncovered multiple points of compromise.
The company’s initial investigation suggested that a compromised laptop might have played a role in the incident. However, subsequent investigations revealed additional security weaknesses.
Binance described the attack as complex, explaining that the attackers deployed a self-destruct mechanism that destroyed some of their tools and digital traces during the operation.
This made it more difficult for security investigators to reconstruct the attack and identify all the individuals involved.
The attackers reportedly exploited a known multi-signature protocol, EIP-7702, to obtain on-chain execution approval over a Binance hot wallet.
According to the company, the delegation bypassed its normal approval controls, allowing the attackers to execute unauthorised transactions.
The discovery has prompted Binance to undertake a comprehensive review of its withdrawal infrastructure and internal security arrangements.
Binance Suspends Withdrawals as Security Review Continues
Following the incident, Binance temporarily suspended its withdrawal service to allow engineers and security specialists to investigate the breach, rebuild the affected infrastructure and conduct fresh tests.
The company said it would not restore the service until the new system passed rigorous security assessments.
It expressed optimism that users would regain withdrawal access before its stated Sunday deadline, which it expected to meet within approximately 40 hours of the announcement.
Beyond rebuilding the withdrawal service, Binance outlined a wider security overhaul covering several critical areas, including:
- Employee and corporate computer systems.
- Cloud infrastructure.
- Cryptographic key management.
- Transaction signing systems.
- Withdrawal approval processes.
- Internal security monitoring.
The company said the review would cover its entire technology infrastructure rather than focus only on the compromised hot wallet.
Binance Works With Law Enforcement to Trace Stolen Assets
Binance also confirmed that it is working with international law enforcement agencies, blockchain intelligence companies, token issuers and other cryptocurrency exchanges to trace the stolen funds.
These partnerships are expected to help investigators identify suspicious wallet addresses, monitor transactions and freeze assets where possible.
Cryptocurrency transactions are recorded on public blockchains, allowing investigators to follow the movement of digital assets. However, tracing stolen funds does not automatically mean authorities can recover them.
The company pledged to use every available legal and technical option to identify those responsible and ensure they face accountability.
Proof of Reserves Report Expected
To reassure customers and the wider cryptocurrency market, Binance said it was preparing an initial Proof of Reserves report for public verification.
The report was expected by Monday, according to the company’s announcement, with an earlier preliminary update also being considered.
Proof of Reserves is a verification mechanism that allows cryptocurrency exchanges to demonstrate that they hold assets corresponding to customer balances.
Binance said the report would provide additional transparency about its financial position and the assets available to meet its commitments.
Why This Matters
The Binance security incident raises important questions about cryptocurrency exchange security, corporate accountability and the protection of customer deposits.
Although Binance says customer funds were not affected, the breach demonstrates how vulnerabilities in hot wallets and transaction approval systems can expose substantial digital assets to sophisticated attackers.
The company’s decision to commit $6.34 billion of corporate funds also highlights the financial responsibility major cryptocurrency exchanges may face when their security infrastructure fails.
For customers, the immediate concern is whether Binance can complete the outstanding $1.34 billion commitment, restore withdrawals safely and provide independently verifiable evidence of its financial position.
For now, Binance says it has secured $5 billion of the $6.34 billion required to cover the affected assets, leaving $1.34 billion outstanding.
The company has promised to complete the purchases, publish its Proof of Reserves report and continue working with global investigators to trace and recover the stolen cryptocurrency.
Frequently Asked Questions
1. How much money has Binance secured following the hack?
Binance says it has secured $5 billion in the exact cryptocurrencies affected by the incident.
2. How much money does Binance still need to secure?
The outstanding amount is approximately $1.34 billion out of its total $6.34 billion commitment.
3. Has Binance recovered $5 billion directly from the hackers?
Not according to the announcement. The $5 billion represents company funds already secured to cover the affected assets. Binance has not disclosed how much stolen cryptocurrency investigators have directly recovered from the attackers.
4. Were customer funds affected?
Binance maintains that customer funds were not affected because the compromised wallet belonged to the company and most customer assets remain in cold storage.
5. When will Binance publish its Proof of Reserves report?
The company said it was targeting Monday for its full Proof of Reserves report, with an initial update potentially available earlier.
6. When will withdrawals resume?
Binance expressed optimism that withdrawal services would resume before its stated Sunday deadline, subject to rigorous security testing.
Conclusion
Binance’s latest announcement shows that the exchange has made substantial progress towards its $6.34 billion financial commitment following the security breach.
With $5 billion already secured and $1.34 billion outstanding, the next major test will be completing the purchases, restoring withdrawal services and providing verifiable evidence that customers’ assets remain protected.
The cryptocurrency industry will also be watching closely to see how investigators trace the stolen funds and whether the attackers can eventually be brought to justice.
