Binance Hack: $6.3B Hit, and What Holders and Miners Do Now

Binance says a security breach hit about $6.3 billion in client assets, and it says it will cover the losses. Withdrawals started coming back on November 1. So here is the plain version of the Binance hack: what is confirmed, what is not, and what we would do if we held or mined bitcoin.

What happened in the Binance hack

On October 29, Binance suspended withdrawals on multiple networks. It called the move a precaution after a security incident, according to TechCrunch. Later, Binance put the impact at about $6.3 billion in client assets, with around $3 billion frozen on-chain. CNBC called it the largest crypto hack on record. Deposits were not affected.

Stablecoin issuers moved fast. Circle said it froze more than $800 million in USDC tied to the incident. Tether said it froze more than $1.5 billion. However, these are the issuers’ own statements, and nobody has verified them independently.

What is still unconfirmed

Binance first pointed at a compromised laptop belonging to a DevOps engineer. Then its co-CEO said the attack was more complex than that. The company also says it found no evidence of a wallet private key leak. A full post-mortem has been promised but not released.

As for who did it, Chainalysis and TRM Labs point to a North Korea-linked group called TraderTraitor. That attribution comes from on-chain analysis, and it is not official. Likewise, the loss figure is Binance’s own estimate of impacted assets. It is not the same thing as the final amount lost.

Are user funds safe?

Binance says it will cover the losses through its SAFU fund, which it set up in 2018. After the restart began, reports said it had restored backing for roughly 90 to 95 percent of the affected assets. The two numbers differ by source, so we are not picking one. In short, users are being told they are covered, but a promise is not the same as a finished repair.

Withdrawals are coming back in phases. Bitcoin went first, followed by Ethereum and BNB Smart Chain. Binance has not said when every network will reopen. Expect delays while volume is high.

What the Binance hack did to the market

Bitcoin fell more than 4% on Friday, October 30, according to CNBC. It trades near $77,899 as we write this on November 1. Meanwhile, U.S. spot bitcoin ETFs lost $643.2 million that same Friday, the biggest one-day outflow since June, per Farside Investors data. That wiped out four days of inflows and left the funds down $202.4 million for the week. Our own Bitcoin price prediction page shows the ranges the model expects from here.

One thing did not move: the network. Bitcoin hashrate averaged about 1,065 EH/s on October 31, according to mempool.space. A hack at an exchange is not a hack of Bitcoin. Miners kept finding blocks the whole time.

What we would do if we mine or hold bitcoin

First, we point our miners at our own wallet. Most pools pay to any address you give them, so there is no reason to let an exchange account sit in the middle. Second, we keep only what we plan to trade on an exchange. Third, we write down which coins are where, because that list is the first thing you want during an incident like this.

If you are building a mining setup, start with the numbers. Our mining economics guides show the arithmetic on real machines, and you can see every miner we have in stock. We also move big lots through our bulk used ASIC miners page.

-Nick
ING Mining

This is general information, not financial advice. Crypto is volatile, and exchanges can fail. Please do your own research.