Binance Faces $3.64bn Customer Withdrawals After $6.3bn Crypto Heist
Binance, the world’s largest cryptocurrency exchange, is facing renewed scrutiny over its security systems after a reported $6.3 billion cryptocurrency heist triggered billions of dollars in customer withdrawals and raised concerns about confidence in digital asset platforms.
Customers withdrew a net $3.64 billion from the exchange within nine and a half hours on Sunday after Binance partially restored withdrawal services, marking an early test of customer confidence following the security breach.
However, the withdrawals have not yet developed into widespread panic. Market analysts described the outflow as relatively modest compared with Binance’s total assets, while the exchange said withdrawal activity was beginning to stabilise.
According to Reuters, Binance said the $3.64 billion in net withdrawals represented 2.1 per cent of its assets. The company also disclosed that it received approximately $1 billion in deposits against $4.6 billion in withdrawals on Sunday.
Binance co-CEO Yi He said the company’s immediate priority was to secure its operating environment before fully restoring services and allowing customers to access their funds. The exchange also said it would absorb the losses from the attack, claiming it had secured $6 billion through its corporate treasury, an insurance fund and resources reserved for security breaches.
The attack, which reportedly occurred on Thursday night, has been attributed by the United States Federal Bureau of Investigation to North Korean state-sponsored hackers identified as the TraderTraitor group. The incident is being described as one of the largest cryptocurrency thefts recorded, highlighting the security risks facing digital asset platforms.
Despite the breach, some traders have maintained their positions on Binance, citing the importance of centralised exchanges for liquidity, trading and access to cryptocurrency markets. Tim Sun, a senior researcher at Hong Kong-based HashKey Group, told Reuters that the withdrawals did not amount to a concentrated rush for the exits. He warned, however, that the incident could influence how institutional investors and market makers allocate funds to cryptocurrencies.
Bitcoin, which fell to a six-week low on Friday, recovered to trade above $78,000 on Monday, while ether also rebounded from a two-month low. However, institutional investors appeared more cautious, with spot Bitcoin exchange-traded funds recording $643 million in outflows on Friday, their largest daily withdrawal in October. More than $1.3 billion in leveraged positions were also liquidated.