Binance pledges to cover full $6.3bn crypto theft after replacing 90%
Binance says it has replaced 90% of the $6.3bn in cryptocurrency stolen in a hack, and will cover the full loss so users do not bear the cost. The scale of the theft, which Binance believes is the largest crypto hack on record, has also raised concerns about the security of major exchanges.
The company says it has set aside more than $6.34bn and replenished assets from various funds and its corporate treasury; the remaining 10% may take longer to source. Bitcoin, ethereum, Tether and seven other widely traded cryptocurrencies are covered. Binance is aiming to resume withdrawals on 1 November, while the investigation continues; it has frozen around $3bn, and analysts suspect North Korea-linked hackers.
In short
- Binance says it has covered 90% of the $6.3bn theft.
- The company has pledged to absorb all losses.
- Withdrawals may resume on 1 November as investigations continue.
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The case for
Binance’s pledge to cover the full loss can be seen as a strong commitment to customers: users should not bear the cost of a breach at a major exchange, and restoring their assets may help preserve confidence in the service. Replacing most of the stolen funds and setting aside resources for the remainder also gives the company time to investigate and source the balance responsibly.
The case against
Covering the loss does not resolve the underlying security concerns, and customers and the wider market may reasonably question how a theft of this scale occurred at a major exchange. The remaining funds may take time to source, withdrawals are not yet fully restored, and the pledge alone cannot establish that Binance’s safeguards are adequate or that similar losses will be prevented.
Explained simply
Cryptocurrency exchanges let people buy, sell and store digital currencies such as bitcoin and ethereum. Binance is one of the world’s largest exchanges, and many customers keep assets there rather than holding them in their own digital wallets.
A hack is an unauthorised attack on computer systems that can give criminals access to cryptocurrency. Because digital currencies can be moved quickly and across borders, stolen funds can be difficult to recover; exchanges may use their own reserves to replace customers’ losses.
The theft has drawn attention to how well major exchanges protect customer assets and what happens when those protections fail. Investigators are trying to trace the stolen funds, while the suspected involvement of North Korea-linked hackers has not been confirmed.
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Originally published by BBC World as “Crypto firm Binance covers 90% of losses after $6.3bn hack”.