Binance faces $3.6 bn outflows after largest crypto theft in its history

Binance, the world's largest cryptocurrency exchange, witnessed net customer outflows of approximately $3.64 billion after resuming withdrawals on Sunday, following a massive $6.3 billion cryptocurrency theft that cybersecurity analysts and US investigators have linked to North Korea, according to media reports.

The exchange had suspended transactions following Thursday's attack, which has been described as the largest theft in its history. Withdrawals resumed in phases on November 1, prompting a surge in customer activity as users sought to move funds out of the platform.

According to figures released by Binance, customers withdrew approximately $4.649 billion in digital assets after services began returning, while deposits totalled around $1.01 billion. The difference resulted in net outflows of about $3.64 billion.

The company said the withdrawals represented approximately 2.1 per cent of the $171 billion in assets under its management.

𝗪𝗶𝘁𝗵𝗱𝗿𝗮𝘄𝗮𝗹𝘀 𝗿𝗲𝘀𝘂𝗺𝗲 𝗮𝗳𝘁𝗲𝗿 𝘁𝗵𝗿𝗲𝗲 𝗱𝗮𝘆𝘀

Binance announced on X that it began restoring withdrawals at 06:00 UTC on Sunday, three days after freezing transactions in response to the security breach.

"By 12:36 UTC, withdrawals had resumed for all 15 networks and assets in the initial phase. After an initial spike, withdrawal volumes have declined and are stabilising as expected, while deposit volumes have remained substantial," the exchange said.

The company indicated that most of the withdrawal and deposit activity occurred during the first few hours after services resumed.

Despite the substantial movement of funds, Binance maintained that withdrawal volumes were stabilising and that market conditions remained stable.

The exchange said its technical teams were continuing to test the remaining networks and assets before restoring additional services.

"Our team continues testing rigorously the remaining networks and assets. We know how important safe and reliable access to your funds is and will share details of the next phase as soon as we can. Rest assured that market conditions are stable," Binance said.

𝗡𝗼𝗿𝘁𝗵 𝗞𝗼𝗿𝗲𝗮 𝗹𝗶𝗻𝗸 𝘂𝗻𝗱𝗲𝗿 𝘀𝗰𝗿𝘂𝘁𝗶𝗻𝘆

According to a report in The New York Times, cybersecurity analysts and the Federal Bureau of Investigation (FBI) attributed the theft to North Korea, which has repeatedly been accused of targeting cryptocurrency businesses to steal digital assets.

The reported attack involved the movement of large quantities of cryptocurrency through numerous transactions, raising questions about the security systems protecting digital asset platforms.

Cryptocurrency analytics firm Chainalysis suggested that the attackers may have used artificial intelligence to accelerate the operation.

The firm observed that the perpetrators processed thousands of transactions within a short period, potentially complicating efforts to identify and freeze the stolen funds.

The reported involvement of North Korea highlights continuing concerns about sophisticated cyberattacks targeting cryptocurrency exchanges and the challenges of tracing stolen digital assets across multiple networks.

𝗕𝗶𝗻𝗮𝗻𝗰𝗲 𝗽𝗹𝗲𝗱𝗴𝗲𝘀 𝘁𝗼 𝗰𝗼𝘃𝗲𝗿 𝗹𝗼𝘀𝘀𝗲𝘀

Binance has said it will cover losses arising from the security breach, seeking to reassure customers about the safety of their remaining assets.

According to The New York Times, the company has also worked with other cryptocurrency firms to freeze approximately $3 billion in stolen digital assets.

Such cooperation is intended to prevent attackers from transferring or converting stolen funds through other platforms.

However, the recovery of frozen assets and the identification of those responsible remain separate challenges.

Binance co-founder Changpeng Zhao addressed concerns about the company's response, saying, "Trust isn't earned by what you say in good times. It's earned by what you do in hard times."

Zhao also warned customers against online fraudsters attempting to exploit the incident by offering fraudulent compensation arrangements.

𝗦𝗲𝗰𝘂𝗿𝗶𝘁𝘆 𝗰𝗼𝗻𝗰𝗲𝗿𝗻𝘀 𝗳𝗼𝗿 𝗰𝗿𝘆𝗽𝘁𝗼 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀

The scale of the reported theft and the subsequent withdrawals have renewed attention on the vulnerability of cryptocurrency platforms to sophisticated cyberattacks.

Although Binance said the net outflows accounted for a relatively small proportion of its total assets, the movement of billions of dollars within hours demonstrated the speed at which customers can respond to security concerns.

The company has maintained that market conditions are stable and that further restoration of services will follow additional security testing.

The incident also underscores the importance of coordinated action among cryptocurrency platforms and investigators, particularly when stolen assets move rapidly across multiple blockchain networks.