U.S. Bitcoin funds attract $17.2 million as Binance incident fallout mounts
Key Facts
U.S.-listed Bitcoin funds recorded net inflows of $17.2 million on Oct. 29, down from $137.3 million the previous day, according to Farside Investors data. Flows remained positive for the fourth session in the period covered by the data, but the gap between the two sessions showed a clear slowdown in the pace of inflows. This coincided with mounting reports of a security incident at Binance, one of the largest cryptocurrency exchanges. The platform said it was investigating a “potential security issue” and estimated the total impact at about $6.3 billion. It said affected assets worth about $3 billion had been frozen on-chain as of Oct. 29.
Binance had said deposits and withdrawals were temporarily suspended for security checks, while The Associated Press reported that the company had not explicitly confirmed a theft of funds when its report was published on Oct. 29. The platform provided its impact estimate while details of the incident were still under investigation. In an initial statement cited by the agency, Binance said a compromise of a laptop belonging to an engineer on the DevOps team was a possible cause. It said this may have allowed the attacker to access a service container and submit unauthorized withdrawal transactions. It added that it had found no evidence of private wallet keys being leaked.
In a later update, TRM Labs said an attacker moved about $6.36 billion from Binance wallets across 10 blockchain networks, with most of the amount transferred in about 20 minutes. The company attributed the attack to the TraderTraitor group and linked it to North Korea with a high degree of confidence. The Associated Press reported that a subsequent investigation uncovered additional points of compromise after the initial suspicion centered on the laptop. A Reuters report said about half of the stolen assets were stablecoins frozen by their issuers. TRM estimated that Bitcoin and Ether worth about $2.4 billion were now beyond the attackers’ reach, noting that some of the funds had been used as collateral to borrow Ether.
Concerns were reflected in prices over the same period. On the evening of Oct. 29, Bitcoin fell 3.2% to below $79,000, according to an Associated Press report. On Oct. 30, it hit a six-week low of $76,368, while Ether fell more than 3% to a two-month low of $2,178 before the market stabilized, according to Reuters. EL7 data show Bitcoin closing at $81,343.5 on Oct. 28, then at $77,991.89 on Oct. 29 and $76,725.31 on Oct. 30. Prices fell even as money continued to flow into the funds in the latest session covered, although the inflow was far smaller than the previous day.
Binance said it would cover losses from the SAFU fund and company resources, and that user funds were safe. The fund holds $1 billion in Bitcoin reserves, according to the platform’s website, as cited by a Reuters report. The Associated Press reported on Oct. 30 that deposits had not been affected and that the company had begun recovering assets for users, while withdrawals were expected to resume within a day or two. Binance also said it would publish an updated proof of reserves after completing the remediation. The platform had pledged to publish additional technical details after the investigation was complete and the facts had been fully verified.
The incident comes amid a market that saw $2.9 billion in cryptocurrency stolen in about 150 incidents during 2025, according to TRM Labs, as cited by Reuters. In February 2025, Bybit suffered a $1.5 billion loss in a hack that the Federal Bureau of Investigation attributed to North Korea and the TraderTraitor group, according to The Associated Press. Developments at Binance keep asset recovery and the suspension of withdrawals at the forefront, alongside the timing of the release of technical details. The platform said those details would be published after the investigation was complete and the facts had been verified. As for the resumption of withdrawals, the company said in its Oct. 30 update that it was expected within a day or two.