$6.3 Billion Binance Hack Precedes Net Outflows and Bitcoin Fund Decline
Key Facts
Binance said its hot wallets were hacked on October 29, resulting in the theft of an estimated $6.3 billion in tokenized assets. The announcement came ahead of a large wave of withdrawals from the exchange, while U.S. spot bitcoin funds also saw outflows. Binance said withdrawals gradually resumed on Sunday, but their return did not prevent net outflows of billions of dollars that day. In markets, bitcoin fell on Friday to a six-week low of $77,646, before recovering slightly over the weekend and trading above $78,000 on Monday. The moves put the hack, fund flows and exchange withdrawals among the indicators the market is watching, as the U.S. midterm elections approach in November.
According to CoinDesk, Binance processed $4.65 billion in withdrawals on Sunday, against $1.01 billion in deposits, recording net outflows of $3.64 billion. The figures followed the phased resumption of withdrawals after a halt linked to the security incident. Net flows measure the difference between money leaving and entering the exchange over the same period, and remained negative despite deposits returning. Binance said the pace of outflows had begun to stabilize as users weighed the platform’s security risks against the ability to withdraw their funds. The company said it had covered about 95% of the value of the stolen assets, worth $6.3 billion, as of its November 2 report, indicating the scale of the response it announced after the hack.
Separate from the Binance withdrawals, U.S. spot bitcoin funds recorded $643 million in outflows on Friday, according to Reuters. The outflows reduced assets under management to $98.14 billion on October 30, taking them below the $100 billion level for the time cited in the CoinDesk report. The report described Friday’s flows as the largest daily outflows since June. Reuters also said liquidations of leveraged positions had exceeded $1.3 billion as of its November 2 report, citing an official at TRM Labs. The report described the outflows and liquidations as signs that investors were reducing risk, as bitcoin fell to a six-week low on Friday before a limited recovery over the weekend.
Derivatives data showed other signs of positions tied to Binance being reduced. Open interest in BNB futures on the exchange fell 5.31%, compared with a 1.12% decline in the token’s price at the time of CoinDesk’s November 2 report. The report interpreted the gap between the two declines as evidence of positions being closed and money leaving, since the contraction in open interest exceeded the price drop. On Deribit, put options were among the three most-traded bitcoin contracts over the 24 hours through November 2. The most-traded was a put with a strike price of $58,000 expiring on November 27, setting the execution level and expiration date for the contract cited. These indicators come as bitcoin remained above $78,000 on Monday after hitting its weekly low on Friday.
On the response to the hack, Binance said in an October 30 update that it had allocated more than $6.34 billion in company funds to cover losses and had frozen about $3 billion in on-chain assets as of that date. The company later said it had covered about 95% of the stolen amount, a proportion based on a loss of about $6.3 billion. The U.S. Federal Bureau of Investigation said a North Korea-backed group was responsible for stealing more than $6 billion in virtual assets from Binance in an attack that took place on or around October 29. The bureau’s statement identifies the group it attributed the attack to and its approximate timing, while Binance’s figures detail the amounts it said it had allocated or frozen after the incident. In the broader market, the U.S. midterm elections were among the events traders are watching; one-third of Senate seats will be up for election in November 2026.
Traders will next focus on the U.S. October jobs report, scheduled for release on Friday, November 6, at 8:30 a.m. Eastern time, according to the Bureau of Labor Statistics. CoinDesk said the report would be among the data the market is watching for its potential effect on interest-rate expectations. The release is scheduled after the midterm elections in November, while investors continue to monitor flows into bitcoin funds and exchange withdrawals following the hack. The jobs report is the next dated economic event on the schedule cited in the coverage, and concerns the U.S. labor market in October. Meanwhile, Binance had announced that it allocated funds to cover losses and froze assets, alongside the gradual resumption of withdrawals.