Binance, the world's largest cryptocurrency exchange, has announced that it has covered 90% of the $6.3bn assets stolen in a recent hack. The company has consistently pledged to cover 100% of the losses and has set aside more than $6.34bn in company funds to do so. Binance said it had replenished the assets using various funds and its own corporate treasury, covering all holdings of bitcoin, ethereum, and Tether, along with seven other widely-traded crypto assets.
The hack, believed to be the largest in history, occurred on Thursday and is suspected to have been carried out by more than one person using sophisticated methods to hide their tracks. According to Richard Teng, Binance's co-chief executive officer, the hackers used a "self-destruct mechanism" to cover their tracks. An initial investigation suggested an engineer's laptop was compromised, allowing access to unauthorised withdrawals, but further investigation uncovered "additional points of breach".
Binance said on Friday that it had frozen around $3bn of stolen assets after working with law enforcement, intelligence firms, and partners. The investigation is ongoing, with the US Secret Service working "around the clock" with private sector partners to identify, freeze, trace, and recover funds stolen from Binance. Two major blockchain analytics firms have pointed to a North Korean state-backed group called The Lazarus Group, also known as TraderTraitor, as the likely culprits.
The Lazarus Group has been linked to previous cryptocurrency hacks, including the theft of $1.5bn on the Bybit exchange last year, for which North Korea was blamed. However, North Korea has always denied involvement in these attacks. The FBI said it had evidence of North Korea's involvement in the Bybit exchange hack.
Binance, founded in China in 2017, has hundreds of millions of users worldwide and allows users to buy, sell, and trade digital assets. The company said its next goal is resuming withdrawal services for users, aiming to reopen withdrawals on Sunday, 1 November, and will provide a further update once details are confirmed.
The hack has raised concerns about the security of cryptocurrency exchanges and the need for robust measures to prevent such attacks. Binance has assured users that it will absorb the financial impact of the stolen funds, not its users. The company's efforts to recover the stolen assets and resume normal operations are ongoing.
The incident highlights the risks associated with cryptocurrency trading and the importance of exchanges having robust security measures in place. Binance's commitment to covering the losses and resuming withdrawals is seen as a positive step, but the incident will likely lead to increased scrutiny of the company's security protocols and the wider cryptocurrency industry.
Key points
- Binance has covered 90% of the $6.3bn hack losses and aims to reopen withdrawals soon.
- The hack is believed to have been carried out by a North Korean state-backed group called The Lazarus Group.
- Binance has set aside more than $6.34bn in company funds to cover the losses from the hack.
