Investors have withdrawn $3.6 billion (£2.7 billion) of funds from cryptocurrency exchange Binance as it recovers from a record hack in which billions were stolen from customer accounts.
The platform was the victim of a $6.3 billion theft on Thursday, which has since been described as the largest heist in history. Experts have identified North Korea as the likely culprit.
Binance initially froze withdrawals while it investigated the breach, but announced on Sunday that it had begun a phased reopening.
As of Sunday afternoon, the platform had processed $4.6 billion in withdrawals and $1 billion in deposits, resulting in a net outflow of approximately $3.6 billion, or 2.1% of its $171 billion in total assets under management.
The figures were confirmed by the company in its latest proof of reserves snapshot. A full report is expected Monday.
Binance said: “After an initial spike, withdrawal volumes declined and stabilized as expected, while deposit volumes remained substantial. »
The crypto exchange told its customers that market conditions were stable and that its team was “rigorously testing the remaining networks and assets.”
“We know how important safe and reliable access to your funds is and will share details of the next phase as soon as possible,” he said on X.
In the first phase, Binance restored withdrawals from 15 networks and assets, including Ethereum, USDT, and USDC tokens on the Ethereum blockchain, as well as a few others held on the BNB Smart Chain blockchain. Later on Sunday, trading of the Dogecoin and Avalanche currencies resumed on their own platforms.
The platform claims to have reconstituted 90% of the stolen amount. The remaining 10% of the tokens were less liquid, meaning they could take longer to purchase, the company said in an article on X on Saturday.
Richard Teng, co-chief executive officer of Binance, said separately that the company was “committed to covering the remaining 10%” and that users would not bear the financial impact of the hack.
On Saturday, the FBI confirmed suspicions from private investigators and analysts that a North Korea-affiliated group called TraderTraitor was behind the hack.
TraderTraitor is reportedly part of the Lazarus Group, which gained notoriety in 2014 when it was accused of hacking Sony Pictures in revenge for The Interview, a film that mocked North Korean leader Kim Jong-un.
“The Federal Bureau of Investigation is releasing information indicating that the Democratic People’s Republic of Korea (North Korea) was responsible for the theft of more than $6 billion in virtual assets from the Binance cryptocurrency exchange on or about October 29,” the law enforcement agency said.
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The FBI added that it observed “TraderTraitor actors” converting stolen assets into Ethereum and expected these assets to be further laundered by converting them using decentralized finance and instant exchange services.
It said it was urging private sector entities “to block transactions with or derived from addresses that TraderTraitor actors” used “to launder these stolen assets.”
Teng said Friday the breach was a “complex attack” involving a compromised laptop and malware designed to remove evidence of its activity, making it “more difficult to trace and investigate.”
Binance said it had set aside approximately $6.34 billion in corporate funds to cover losses. “Our commitment remains the same: Binance will fully cover the financial impact of funds stolen in this incident,” the company said.
The money spent to buy back tokens comes from using part of its billion-dollar secure asset fund for users, a reserve of bitcoins it holds to protect customers in the event of security breaches, as well as part of its futures insurance fund and its own corporate treasury, Binance said on X.
The hack came as many observers expressed concerns that the ever-increasing capabilities of artificial intelligence models could compromise cryptography and computer security protocols.
Bitcoin plunged almost 5% after news of the hack, while Ethereum fell almost 6% and Binance’s native BNB fell almost 10%.
The sheer scale of the hack highlighted the ability of North Korea – which faces significant international sanctions over its nuclear and missile programs – to find illicit ways to capture revenue.
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