Binance, the global cryptocurrency exchange, has officially stated that it will fully compensate users for losses caused by a security incident involving approximately $6.3 billion. About $3 billion of the affected assets have already been frozen on the blockchain. The company plans to use its own funds and its user asset protection fund to cover the damages.

$6.3 Billion Lost in Hot Wallet Breach... Company to Bear the Financial Burden

In its 'Security Incident Update No. 2,' Binance explained that at around 8:05 p.m. on the 29th (UTC), its hot wallets were compromised, resulting in the loss of token assets worth approximately $6.3 billion. In Korean time, this was 5:05 a.m. on the 30th. The company stated that it would bear the financial losses from this incident itself and ensure that users suffer no harm.

Over $6.34 Billion Secured for Compensation... $5 Billion Held in USDC, USDT, BTC, ETH, and BNB

The compensation will draw on SAFU, the user asset protection fund, as well as the company's own treasury. Binance said it has already set aside more than $6.34 billion in company funds, of which $5 billion is held in related token assets such as USDC, USDT, Bitcoin (BTC), Ethereum (ETH), and Binance Coin (BNB). This amounts to roughly 80% of the total damages. The remaining related token assets are being secured through market and over-the-counter transactions, the company explained.

$3 Billion of Stolen Funds Frozen... Freezing Does Not Mean Recovery

Efforts to track and freeze the stolen funds are also underway. Binance said it is working with law enforcement, blockchain analytics firms, asset issuers, and industry partners, and has so far frozen about $3 billion worth of assets on the blockchain. However, freezing the assets does not immediately mean actual recovery. Whether and when the frozen assets will ultimately be recovered is expected to be determined through subsequent procedures.

Cause Investigation: Signs of a Compromised Laptop... No Evidence of Private Key Leakage

The investigation into the cause of the incident is ongoing. Binance said its initial investigation confirmed that a compromised laptop may have been involved, but additional points of compromise were discovered during follow-up investigations. According to the company, no evidence of wallet private key leakage has been found so far. Binance said its internal technology and security teams, along with outside experts, are investigating the full attack path and related factors, and it plans to release verified additional technical findings within approximately 48 hours.

Withdrawals Temporarily Suspended... Phased Resumption Within 34 Hours of the Notice

The company also laid out a timeline for restoring withdrawal services. Binance explained that it has blocked the compromised infrastructure, revoked related access privileges, and implemented security measures to prevent further unauthorized fund movements. Withdrawals are currently suspended temporarily for security review and system integrity checks. Deposits and other platform services unaffected by the incident are operating normally, the company said. Once the security review is complete, Binance plans to gradually resume withdrawal services within about 34 hours of the notice. However, the actual resumption time may vary depending on technical verification and the completion of security checks.

Proof-of-Reserves Snapshot Within 12 Hours... Results by November 2

Binance also plans to publish a proof of reserves to verify its holdings of user assets. The company said it will conduct the initial proof-of-reserves snapshot within 12 hours of the notice and provide the results by Monday, November 2. This is intended to allow users to verify the platform's asset holdings and the level of reserves backing account balances.

Post-Mortem Report to Be Released Separately... Key Points to Watch

Binance said it will continue working with law enforcement and industry partners to track and recover the stolen funds. A post-mortem report covering the incident's circumstances, security vulnerabilities, and remediation measures will also be released separately. In this announcement, Binance identified key tasks including: compensating user losses, restoring withdrawal services, recovering stolen assets, and strengthening security systems. Going forward, the actual resumption of withdrawals, the proof-of-reserves results, and the progress in recovering frozen assets are expected to be the main points to watch.

[This article was written based on a notice provided in Binance's name. This article was produced in part with the assistance of AI.]