Binance Sees $2.5 Billion in Outflows After Resuming Withdrawals Post-Hack
Binance's tracked cryptocurrency wallets recorded net outflows of $2.5 billion on November 1, following the exchange's decision to resume withdrawals after a significant security breach that resulted in losses of $6.3 billion. According to data from DeFiLlama, the outflows comprised approximately $1.08 billion in USDT, $912 million in Bitcoin, $385 million in USDC, and $131 million in wrapped Ethereum.
These outflows occurred as Binance began to gradually reopen its withdrawal services after the attack on October 29, which the FBI linked to North Korea's TraderTraitor hacking operation. In a statement on November 1, Binance announced that it was restoring withdrawal access across 15 blockchain networks after conducting additional security reviews.
Initially, withdrawals were reopened for Bitcoin, Ethereum, BNB Smart Chain, XRP, and Base, with subsequent support confirmed for Dogecoin and Optimism. Other networks included in the first phase of reopening were Solana, Tron, Arbitrum, Avalanche, Polygon, Zcash, and Sui, with individual assets becoming available as security checks were completed.
Binance co-founder Yi He reported that withdrawal processing was proceeding without significant disruption, although she noted that increased demand could lead to temporary congestion. She advised customers to verify withdrawal addresses and ensure their devices were secure before initiating transfers.
Binance Enhances Security Measures Post-Breach
In response to the breach, Binance updated its proof-of-reserves wallet address list to include newly generated wallets, which would handle all subsequent withdrawals. This infrastructure change followed the multibillion-dollar breach that had forced the exchange to temporarily suspend withdrawals while investigations into its compromised hot-wallet systems were conducted.
Binance has assured customers that their funds remain protected and that the company will absorb the financial losses incurred from the attack. The exchange reported that it had replenished about 95% of the affected assets through corporate resources and market purchases, an increase from 90% in its previous update. It also confirmed that balances in Bitcoin, Ethereum, USDT, USDC, BNB, Solana, XRP, USD1, RLUSD, and Zcash were fully backed, while the remaining unreplenished assets were primarily less-liquid tokens.
Case Closed
However, it is important to note that replacing stolen assets does not equate to recovering the original funds from the attackers. Binance continues to collaborate with law enforcement and industry partners to trace and potentially recover these assets. The extent to which the observed on-chain outflows reflect customers moving their assets elsewhere remains uncertain, particularly as Binance transitions withdrawals to newly generated wallets.
The exchange has committed to publishing a detailed post-incident investigation report, and its updated proof-of-reserves disclosures are expected to provide further insights into the assets backing customer balances.
