Binance Reopens Withdrawals as Hack Recovery Enters Second Week
Customer withdrawals resumed on Sunday at Binance, four days after hackers made off with approximately $6.3 billion from its hot wallets in the largest cryptocurrency theft in history.
The platform rolled out the reopening in phases over the weekend, starting with bitcoin before expanding to 15 different networks. This marked the initial major test of whether the exchange could withstand a loss of that magnitude without locking users out of their accounts for an extended period.
Recovery efforts kicked off on Saturday. In its third update regarding the incident, Binance reported it had replenished 90% of the affected funds using its own capital. The exchange utilized a portion of its Secure Asset Fund for Users, a segment of its futures insurance fund, and its corporate treasury to purchase replacement tokens.
The allocation from the futures fund drew notable scrutiny, as Binance noted that the remaining balance serves as a regulatory requirement. Additionally, the exchange released a fresh proof-of-reserves snapshot dated October 31, providing customers with a benchmark to verify their account balances.
Sunday’s phased reopening launched at 06:00 UTC with BTC. Binance subsequently incorporated ETH, BNB Smart Chain, Solana, XRP, Dogecoin, Tron, Polygon, Avalanche, Arbitrum, Base, Optimism, Zcash, TON, and Sui. Between 06:00 and 15:30 UTC, the exchange handled around $4.65 billion in withdrawals against approximately $1.01 billion in deposits.
That activity resulted in a net outflow of roughly $3.64 billion, which equals about 2.1% of the $171 billion in assets Binance listed in its late-October proof of reserves.
Deposits remained operational throughout the process, and management warned that temporary slowdowns might occur during the initial surge of traffic.
Binance announced that its Sunday update increased coverage to 95% of the impacted sum. The remaining 5% consists of less liquid tokens that fall outside the top ten assets featured on its proof-of-reserves roster. Acquiring those specific tokens at the necessary scale demands extra time, and the exchange stated it is collaborating with industry partners and over-the-counter desks to finalize the acquisitions. Binance has pledged to absorb the entire loss, reiterating that users will not experience any financial consequences from the breach.
On Monday, Binance confirmed that the complete zero-knowledge proof for the October 31 snapshot is finished. Individuals holding BTC, ETH, USDT, BNB, SOL, USDC, XRP, USD1, RLUSD, or ZEC can execute the platform’s verifier to check that their balances maintain at least a 1:1 backing.
The verifier is open-source, and the exchange has directed users toward a detailed step-by-step tutorial.
The exchange schedules another snapshot encompassing a broader range of tokens for November 4, with the corresponding proof anticipated to require 40 to 50 hours for generation. An additional withdrawal phase is lined up for Tuesday, and leadership promised to release specifics once the rollout is prepared.
Binance hack background
Regarding law enforcement investigations, the FBI has blamed North Korea for the strike, while the U.S. Secret Service collaborates with Circle to track and freeze assets. Tether stated it froze roughly $1.57 billion in USDT, and Circle confirmed it locked down more than $800 million in USDC alongside regulatory authorities.
The market responded aggressively to the exploit. Bitcoin dropped roughly 5% to fall below $77,000 shortly after the incident, while equities for Coinbase, Robinhood, Strategy, and Strive all dipped as traders assessed the threat of exchange-wide losses across the industry.
Binance disclosed it uncovered extra vulnerability points beyond the original breach, which it initially blamed on a single engineer’s laptop. The exchange has not yet released a comprehensive post-mortem detailing how the hackers planned and carried out the exploit, which some estimates indicate required a minimum of 36 hours of preparation.
The final location of roughly $3.3 billion in stolen assets that avoided being frozen remains unexplained, and the exchange has yet to clarify what portion it expects to recover from that pool. Investigators keep monitoring wallet movements across ten blockchains.
FAQ
When did Binance restart customer withdrawals?
Binance restarted customer withdrawals on Sunday, four days after the hack.
How much was stolen from Binance hot wallets?
Hackers drained roughly $6.3 billion in the largest crypto theft on record.
Who did the FBI blame for the Binance hack?
The FBI has attributed the attack to North Korea.
How much of the impacted amount has Binance replenished?
Binance raised its coverage to 95% of the impacted amount and committed to covering the full sum.
