Binance estimates $6.3 billion impact from security incident

Binance says a security incident led to unauthorized withdrawal transactions with an estimated impact of $6.3 billion, raising questions about how the attacker reached its systems and whether funds can be recovered. In an update from its verified Binance News account, the exchange said it had frozen about $3 billion of affected assets with help from blockchain partners.

The Associated Press reported that Binance first said Thursday, Oct. 29, that it was investigating a potential security issue. The exchange later put the estimated impact at about $6.3 billion. Binance has not published a technical post-mortem, saying it will do so after the investigation is complete and the facts are verified.

How did the attacker get access?

Binance’s preliminary investigation points to a DevOps engineer’s laptop that may have been compromised. The attacker then accessed a service container and submitted unauthorized withdrawal transactions, the exchange said. A service container is a software environment used to run an application or part of one.

Binance said it had found no evidence that wallet private keys were leaked. Those keys control access to crypto held in wallets. The exchange has not said publicly which assets or addresses were involved, or how the attacker gained access to the laptop.

What has Binance done since the incident?

Binance said it temporarily suspended deposits and withdrawals while it ran security checks, and revoked authorization for affected addresses. It is working with law enforcement and blockchain intelligence partners to trace and recover funds.

The exchange said it will cover all losses through its Secure Asset Fund for Users, known as SAFU, and its own funds. Binance also said it plans to update its proof of reserves, a record used to show assets held against customer balances, after remediation is complete.

How much has been frozen so far?

Binance’s update put the amount frozen on-chain at about $3 billion. The AP reported that stablecoin issuers Tether and Circle also said they had frozen funds connected to the incident: more than $1.5 billion in Tether’s case and more than $800 million in Circle’s.

Those figures describe funds frozen so far, not a final recovery total. Binance has not yet published its promised technical report, and the investigation could change what is known about the incident and its impact.

Sources and documents

• update from its verified Binance News account — binance.com