Binance pledges to cover billions in stolen assets after hack revives crypto fears

A record-setting cyberattack targeting the world’s largest cryptocurrency exchange rocked the digital assets industry Friday, delivering another blow to a sector already struggling to achieve mainstream adoption. The exchange, Binance, announced late Thursday that more than $6 billion appeared to have moved through wallets connected to a security breach. Around $3 billion of that had potentially been located and frozen across several exchanges, though it was not immediately clear if those funds were recoverable. Early Friday, the company said it had set aside $5 billion to make affected users whole, and was working with partners to purchase an additional $1.34 billion to cover the total amount believed to have been stolen. The hack is the latest setback for crypto, which continues to reckon with a reputation for being too volatile — and too vulnerable to criminal activity — for widespread use. The scale of the hack echoes collapse of crypto exchange FTX, which, though not the result of a cyberattack, caused billions in losses. The renewed doubts were reflected in Bitcoin’s value Friday, which fell more than 5% overnight to approximately $77,000, accelerating its month-long downturn. Other affected cryptocurrencies fell as much as 9%. The crypto industry was already reeling from the failure in Congress of the Clarity Act, a bill that would have granted comprehensive legal protections for crypto assets in the U.S. Despite bipartisan support for the core elements of the legislation, its passage was torpedoed by a battle over conflict-of-interest rules for elected officials, notably President Donald Trump. The president has disclosed in filings that he earned more than $1 billion from crypto last year. The Binance hack stands to prolong this reckoning, experts said. “There will be an imperative for Binance to cover losses not only for its own reputation and value, but I expect there will be a level of co-operation within the space as they look at the collective reputational harm this may, rightly or wrongly, cause to the sector,” Laura Clatworthy, head of digital assets at Edwin Coe said in a statement. That cooperation was seen in the immediate reaction of other mainstream crypto players. Crypto firms Tether and Circle, which operate the two-largest stablecoins, worked quickly to freeze assets implicated in the hack. FOR SUBSCRIBERSTop general fired by Hegseth amid leak investigation FOR SUBSCRIBERSAn ugly, Islamophobic turn in Michigan’s Senate race FOR SUBSCRIBERSFDA plans to update nutrition rules for infant formula However, U.S. blockchain analysis firm TRM Labs estimates that $2.4 billion in Bitcoin and Ethereum will never be recovered. FOR SUBSCRIBERSTop general fired by Hegseth amid leak investigation FOR SUBSCRIBERSAn ugly, Islamophobic turn in Michigan’s Senate race FOR SUBSCRIBERSFDA plans to update nutrition rules for infant formula As of Friday morning, the hack’s origins remained murky. The whole heist unfolded in just 20 minutes starting at approximately 4 p.m. ET Thursday. Binance initially said the attack involved a compromised laptop. “However, our subsequent investigation has uncovered additional points of breach,” it said in a statement on X, without elaborating. Multiple blockchain analysis firms said the hack had attributes associated with previous operations believed to have been carried out by North Korean actors. Binance co-CEO Richard Teng said Binance’s investigation had not yet identified the attackers. At least one prominent tech CEO could not resist making light of the situation. Elon Musk left a “yikes” emoji in response to an X user who noted that the collapsed crypto exchange FTX had initially also told users their funds were safe amid a wave of losses. Binance co-founder CZ Zhao responded:“Elon, have a lot of respect for you, but bad time to troll. Please stop.” Zhao noted that his SpaceX shares — the product of a Binance-related $500 million investment in Twitter, were now worth more than $1 billion. “Would appreciate if you show a little support. Thanks!” [Image text:] BINANCE CONN BINAIC