Binance Stops Withdrawals After $6.3 Billion Security Breach, Makes Promise to Users
- Binance has temporarily suspended withdrawals following a security breach estimated to have caused $6.3 billion in losses
- The exchange says it has frozen about $3 billion in assets and will cover all losses using its emergency fund and company money
- Binance says customers' funds and deposits are safe while investigations continue
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Legit.ng journalist Victor Enengedi has over a decade's experience covering energy, MSMEs, technology, banking and the economy.
Cryptocurrency exchange Binance has temporarily halted withdrawals after a security breach that reportedly exposed the company to about $6.3 billion in financial losses.
The exchange’s co-CEO, Richard Teng, said Binance would cover all losses using its Secure Asset Fund for Users (SAFU) and company resources, assuring customers that their funds remained safe.
Source: UGC
In a post on X on Friday, Teng disclosed that the company had frozen approximately $3 billion worth of assets on the blockchain through collaboration with its industry partners.
Binance traces attack to compromised engineer's laptop
Teng said preliminary findings suggested that the security incident may have originated from a compromised laptop belonging to a DevOps engineer.
According to him, the attacker allegedly exploited access to a service container to submit unauthorised withdrawal transactions.
However, he stressed that the breach involved a sophisticated series of actions rather than a simple compromise of an employee's access privileges.
“Our initial investigation suggests this security incident may have started with a compromised DevOps engineer’s laptop. That gave an attacker access to a service container, where they submitted unauthorised withdrawal transactions,” he said.
The Binance executive added that investigators had not identified any individual responsible for the incident.
He also disclosed that the company had found no evidence suggesting that wallet private keys were exposed during the attack.
Exchange suspends withdrawals as investigation continues
Following the breach, Binance temporarily suspended withdrawals while strengthening security measures around its withdrawal services and associated addresses.
Teng said the exchange had withdrawn authorisations linked to the affected addresses and was working with law enforcement agencies and blockchain intelligence firms to track and recover the stolen funds.
He added that deposits were unaffected and continued to operate normally, reassuring customers that their assets remained protected.
“Bottom line – your money is safe, and we’re covering every loss,” Teng said.
Binance promises full compensation for affected users
The exchange said it would use its SAFU emergency reserve and corporate funds to absorb all financial losses resulting from the security incident.
The SAFU fund was established to provide an additional layer of protection for Binance users during unexpected security-related events.
Source: UGC
Teng said the company would release a comprehensive technical report explaining how the breach occurred and the measures taken to address it after completing its investigation and verifying the findings.
The latest incident highlights the security risks facing cryptocurrency exchanges, particularly as hackers continue to target digital asset platforms and their underlying infrastructure.
Binance bans 17 crypto platforms
Meanwhile, Legit.ng earlier reported that Binance placed restrictions on 17 cryptocurrency platforms globally, including three Nigerian-linked entities.
The move followed US Treasury sanctions against a Dubai-based exchange and EU measures targeting platforms.
Binance warned users that any transactions involving the listed platforms after the effective dates.
Source: Legit.ng
