Binance Secures Most Funds Lost in North Korean Crypto Hack
The theft, which occurred Thursday, is considered the largest cryptocurrency hack in history. Binance has sought to reassure customers that all affected funds will be covered through a combination of company assets, an insurance fund and a $1 billion strategic bitcoin reserve.
Former Binance CEO Changpeng Zhao also attempted to restore confidence among users after the exchange resumed withdrawals following a temporary suspension.
"Trust isn't earned by what you say in good times. It's earned by what you do in hard times," Zhao wrote in a post on X on Sunday.
Zhao left his position as Binance CEO in 2023 after pleading guilty in the United States to violating criminal anti-money laundering requirements. US President Donald Trump later pardoned him. Zhao remains the exchange's largest shareholder.
Despite the company's assurances, customers withdrew billions of dollars after services resumed. Binance recorded net outflows of $3.6 billion during the first nine hours, representing approximately 2% of the $171 billion in assets managed by the platform.
Binance functions as both a cryptocurrency exchange and custodian, allowing customers to trade digital currencies such as bitcoin and store their holdings on the platform.
The stolen funds comprised several types of digital assets, including stablecoins, which are cryptocurrencies generally designed to maintain a fixed value, often pegged to the US dollar and supported by reserves held by their issuers.
Following the breach, stablecoin issuers froze approximately $3 billion in affected assets, restricting the hackers' ability to transfer or launder those funds. Binance also repurchased various cryptocurrencies through open-market transactions and released evidence supported by cryptographically verified internal records and transactions documented on the public blockchain.
The FBI and independent cybersecurity analysts have linked the attack to TraderTraitor, a hacking group associated with North Korea that has been implicated in several major cryptocurrency thefts.
Digital asset exchanges have repeatedly been targeted by North Korean-linked hackers, with some platforms struggling to reimburse customers after major security breaches. Indian exchange WazirX, for instance, lost approximately $234 million, representing nearly half its assets, in a 2024 attack before entering restructuring.
Although Binance has sufficient resources to cover the reported losses, the incident has drawn attention to the limited regulatory protections available across the cryptocurrency industry. Unlike conventional banking institutions, much of the sector operates without comparable government-backed deposit insurance for customers.
Cybersecurity and blockchain analysis firms have played a major role in tracing the stolen assets by monitoring transactions recorded on public networks.
Security companies Elliptic and Chainalysis reported that the attackers appeared to have transferred funds across numerous cryptocurrency wallets through an automated process, based on the timing and speed of the transactions. Some movements reportedly continued overnight in Pyongyang.
However, Elliptic researcher Tom Robinson noted that certain transactions appeared to involve human involvement, including small test transfers conducted before larger sums were moved.
The breach has also prompted questions about the potential use of artificial intelligence to identify and exploit weaknesses in financial systems. However, no clear evidence has emerged that AI played a role in the Binance attack.
The incident has renewed concerns about security standards and regulatory oversight across the cryptocurrency sector, although some industry executives believe it could encourage exchanges to strengthen their protective measures.
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