Binance expands withdrawals on Nov. 3 after hack estimated to have caused $6.3 billion in losses
Key Facts
Binance will begin making additional asset withdrawals available at 04:00 UTC on Nov. 3, following the first phase launched on Nov. 1, expanding the recovery from a hot-wallet hack that it estimated caused losses of about $6.3 billion. The platform said in its announcement that assets and networks would not all return at once, but would be reopened gradually as security and readiness checks for each were completed. Binance had temporarily suspended withdrawals to conduct security reviews after the incident. It said deposit services remained open and were unaffected by the suspension. The phased restoration brings back users’ ability to transfer their assets while security measures and checks on service readiness continue.
The hack occurred at about 20:05 UTC on Oct. 29, when the platform’s hot wallets were compromised, according to a Binance security update. The company estimated the value of the affected token assets at about $6.3 billion. In a later update, it said it had covered about 95% of the financial impact, with the remaining 5% involving tokens outside the top ten listed tokens it had cited. Binance said it had assembled $6 billion from its corporate treasury, insurance fund and reserves earmarked for security breaches to cover the losses. The company described the funds as its own, as withdrawals were gradually returning after the security suspension.
Alongside the resumption of withdrawals, customers had withdrawn a net $4.72 billion since the suspension was lifted on Sunday morning, according to a Binance spokesperson cited by Reuters. The platform estimated that amount represented about 2.8% of its assets. Binance said withdrawal volumes initially surged before falling and stabilizing, and a spokesperson said inflows reached $2.7 billion. Analysts described the net figure as relatively limited compared with the platform’s assets and said it indicated that customer confidence had largely held up. Stable withdrawal volumes alone do not prove that customers have regained confidence; the picture combines net outflows with inflows over the same period.
The current figures compare with net outflows of about $6 billion from Binance over 72 hours after the collapse of FTX in December 2022. Reuters also cited a comparison with about $7 billion withdrawn from the USDC stablecoin over a week after the collapse of Silicon Valley Bank in 2023. In that comparison, the first figure relates to platform flows after a competitor’s collapse, while the second refers to withdrawals from a stablecoin after a banking crisis. These precedents provide context for measuring the scale of the movement following the current hack; they are not a unified estimate of the reasons for withdrawals. Binance’s current asset movements include net withdrawals of $4.72 billion and inflows of $2.7 billion, according to figures disclosed by the company.
In the cryptocurrency market, Bitcoin recovered over the weekend after hitting a six-week low on Friday, trading near $78,000 on Monday, Nov. 2. Ether also rebounded after falling to a two-month low. The price recovery coincided with the return of withdrawals in their first phase and a decline in volumes after the initial surge, according to Binance. Yi He, the company’s co-CEO, linked the resumption of user activity to the priority of securing the operating environment, saying: "Our priority now is to ensure the security of the environment, after which users can withdraw their funds and Binance can resume operations." She added that restoring services was tied to completing security and operational arrangements.
Binance said it had prioritized the return of tokens based on user demand during the week before the announcement, and that each network and asset pair would return after strict security checks. It warned that temporary delays could occur or processing could take longer during the restoration. It also said it had completed a zero-knowledge proof of reserves based on a snapshot taken at 00:00 UTC on Oct. 31. The proof covers balances in 10 tokens, and the platform said their holders can independently verify that their balances are backed at a ratio of at least 1:1. Binance plans to take another snapshot on Nov. 4 covering additional tokens, then prepare a full updated proof, which it said could take about 40 to 50 hours.
Binance continues to tie the release of further details about the hack to the conclusion of its investigation. In its recovery launch update, it said it would publish an incident report once it was complete and described the resumption of withdrawals as an important milestone as work continues. The new reserves snapshot scheduled for Nov. 4 is among the next announced steps, to be followed by preparation of the full updated proof within the time estimated by the company. Withdrawals for other assets will continue to return gradually, depending on each network and asset’s readiness and completion of checks, with no single date for making them all available. Binance said security enhancements and the completion of the recovery would continue alongside the restoration of services.