Binance has pledged to cover all customer losses from a security breach with an estimated impact of $6.3 billion, as the cryptocurrency exchange scrambles to contain the fallout from one of the industry's biggest hacks.
“Binance will cover all losses from the SAFU [Secure Asset Fund for Users] fund and the company’s funds. User funds are safe. We will also publish an updated Proof of Reserves once the remediation is complete,” a Binance spokesperson said.
Binance's SAFU, established in 2018 to protect customers against losses from security breaches, has historically held about $1 billion. The exchange has not disclosed how much it expects to draw from the fund or its own reserves to cover the losses.
The cryptocurrency exchange said about $3 billion in affected assets had been frozen on-chain, while deposits and withdrawals remained temporarily suspended as security teams investigated the incident.
“Users will not bear the financial impact of this incident. Binance will cover all losses,” the spokesperson said.
The breach also rattled cryptocurrency markets, with Bitcoin falling 4.5 per cent to $76,664 early on Friday, while Ether dropped 5.2 per cent and BNB, the token linked to Binance, slid 7.1 per cent. More than $1.5 billion in leveraged cryptocurrency positions were liquidated over 24 hours.
An initial investigation suggests the breach may have originated from a compromised laptop belonging to a DevOps engineer, allowing attackers to access a service container and submit unauthorised withdrawal transactions.
Binance said it had found no evidence that wallet private keys had been leaked and had revoked the affected address authorisation. It is working with law enforcement and blockchain intelligence partners to trace the stolen assets.
Despite the assurances, the incident prompted concern and scepticism among cryptocurrency users on social media.
Anchorage Digital, a regulated financial services and technology platform, the first federally chartered cryptocurrency bank in the US and whose website banner reads "crypto with confidence", rushed to X to address concerns to their clients.
"On the Binance situation: we're aware, we're in touch with our clients, and we’re unaffected," wrote chief executive Nathan McCauley. "We're working with the industry to prevent further movements of stolen assets."
On Reddit, user setokaiba22 questioned the Binance's assurances, writing: “Well they’ve said customer funds are fine … not that I’d trust that.”
Another Reddit user, Tinre, responded: “FTX said the same thing,” referring to the collapsed cryptocurrency exchange.
Others were more supportive. Reddit user Elean0rZ said Binance had a history of compensating customers following security incidents. “They've always been very good about making customers whole, so I wouldn't doubt it, honestly,” the user wrote.
Crypto King called on others to rally support for the exchange and posted "Stand with #Binance in their time of peril" on X.
One Reddit user felt that trust in all crypto exchanges has been called into question after this.
“Where do I put my funds now? Can’t trust exchanges. Can’t trust cold wallets,” the user wrote. “Are ETFs the only safe thing now?”
An X user said this hack is a shake up for the entire crypto cause. "Such a bad look for the entire crypto industry," wrote ALLINCRYPTO on X.
Binance said it would publish a detailed technical report once its investigation was complete, alongside an updated Proof of Reserves.
