Binance Acts to Recover Stolen Altcoins from $6.3B Hack
After a significant security breach, Binance is actively buying back stolen cryptos using its reserves to restore affected assets.
In response to a major security breach that resulted in the theft of $6.3 billion worth of cryptocurrencies, Binance has initiated the process of repurchasing the stolen altcoins. Utilizing company reserves and market transactions, Binance aims to replace the affected assets with equivalent amounts.
Financial Reserves in Action
Following the incident on October 29, Binance has set aside over $6.34 billion to offset the losses. To date, the exchange owns around $5 billion worth of the affected cryptocurrencies and is procuring the rest via cryptocurrency exchanges and over-the-counter (OTC) trading desks.
Yi He, co-founder of Binance, confirmed that the company is leveraging its Secure Asset Fund for Users (SAFU) alongside its existing cryptocurrency holdings, which include large amounts of Bitcoin (BTC) and Ethereum (ETH). The goal is to acquire the stolen altcoins in matching quantities.
Understanding the Recovery Process
As Binance moves forward with its recovery strategy, some purchases may experience delays due to the limited liquidity of certain assets in the market. Furthermore, privately negotiated OTC transactions require a settlement phase, which can slow down the overall process.
The reported figures showcase a distinction: the $6.34 billion indicates the reserves Binance has allocated, while the $5 billion points to the cryptocurrencies already held. Importantly, neither figure outlines how much new buying is necessary on the open market.
Link to North Korean Cybercrime
As investigations unfold, Chainalysis has connected the hack to a North Korean cybercrime group known as TraderTraitor. They have reported unusual activities relating to the laundering of stolen funds. After the breach, an on-chain tracking tool identified that the attacker had sold a substantial amount of stolen altcoins for Ethereum shortly after the hack.
The attacker reportedly exchanged 7.02 million UNI for approximately $39.63 million, and sold 7.77 trillion PEPE for around $31.66 million, among other transactions. The sales generated a significant amount of ETH during a period of increasing market volatility.
Support During Recovery
In light of these events, Binance's partner in Thailand, Gulf, has offered liquidity assistance to help the exchange during this recovery phase. Binance's founder, Changpeng Zhao (CZ), noted that while the exchange is capable of covering the losses independently, the offer of support is welcomed.
Binance TH has assured its customers that their assets are safe due to independent custody arrangements and secure cold wallets. Additionally, the local branch temporarily suspended deposits and withdrawals to ensure security but continued other operations as planned.
As Binance continues to work on recovery efforts, further updates will be provided to customers, including audits to verify holdings through its Proof of Reserves reporting.
