Binance faces major capital outflows after cyberattack
Clients of the world's largest cryptocurrency exchange Binance began actively withdrawing funds after the resumption of operations suspended due to a large-scale hacker attack. By November 2, net capital outflow from the platform reached $4.72 billion. The company claims that the situation is gradually stabilizing and there has been no mass loss of user trust.
Reuters reports this, citing Binance representatives and cryptocurrency market participants.
The exchange resumed cryptocurrency withdrawals on November 1 after an almost two-day suspension caused by the theft of digital assets worth about $6.3 billion. According to the company, the net outflow amounted to approximately 3% of funds held on the platform.
The majority of withdrawn assets were in the stablecoin USDT issued by Tether. At the same time, Binance recorded client deposits totaling about $2.7 billion since operations resumed.
Exchange representatives said that after an initial sharp increase in withdrawal requests, client activity began to decline. New deposit volumes remain significant.
Analysts believe that the outflows do not yet indicate a large-scale crisis of confidence in Binance. Despite the substantial amount, withdrawals remain limited relative to the exchange's total asset volume.
For comparison, after the collapse of the FTX cryptocurrency exchange in December 2022, Binance clients withdrew about $6 billion within 72 hours. And after the bankruptcy of the American Silicon Valley Bank in 2023, approximately $7 billion was redeemed from Circle's USDC stablecoin within a week.
Senior researcher at HashKey Group Tim Sun noted that the current situation has not yet led to mass panic among clients or large-scale simultaneous asset withdrawals.
According to Binance, more than 335 million users are registered on the platform worldwide, and average daily trading volume in cryptocurrencies and derivatives is about $95 billion.
The exchange is also continuing to replenish reserves after the hack. According to an official company statement from November 1, Binance has already replenished about 95% of the lost assets using its own resources.
The remaining 5% consists mainly of less liquid tokens, the purchase of which requires additional time. The exchange promises to fully compensate for the hack's consequences and not pass financial losses on to users.
Replenishing reserves does not mean that the stolen cryptocurrency has already been returned. The company is using its own funds to purchase replacement assets while cooperating with law enforcement agencies and blockchain analysts to track the stolen funds.
Recall that on October 29, unknown parties gained unauthorized access to Binance hot wallets and withdrew cryptocurrency worth about $6.3 billion. The US Federal Bureau of Investigation later stated that the attack was carried out by the North Korea-linked hacker group TraderTraitor.
According to Reuters, stablecoin issuers froze part of the stolen assets. Circle reported freezing more than $1.1 billion in USDC. Elliptic analysts estimate the funds remaining at addresses linked to the hack at approximately $3.24 billion and note a sophisticated automated scheme for moving them.
The consequences of the attack also affected the cryptocurrency market. After falling to a six-week low on Friday, bitcoin partially recovered and traded around $78 thousand on November 2. Ethereum also recovered some losses after reaching a two-month low.
Analysts have not recorded signs of a large-scale spread of the crisis to traditional financial markets. However, industry participants warn that the record hack could increase institutional investors' concerns about the security of digital asset storage.
Earlier, Kurs Ukrainy reported that Binance had recovered 90% of lost assets and was preparing to resume withdrawals. The new data shows client reaction after the actual resumption of operations and allows assessment of the scale of capital outflow.
