Binance Deploys SAFU Funds Following $6.3 Billion Bitcoin Hack
Binance's publicly disclosed emergency Bitcoin wallet showed about half its prior balance on Monday after the exchange utilized its user protection fund to offset losses from a $6.3 billion hack that occurred on Thursday.
Binance confirmed on Saturday a transfer of 7,499 Bitcoin (BTC), attributing this move to a partial draw from its Secure Asset Fund for Users (SAFU).
By Monday, the emergency wallet held roughly 7,500 BTC valued at $583 million, down from approximately 15,000 BTC before the transfer.
This unprecedented cryptocurrency heist forced Binance to halt withdrawals as it worked to restore the stolen assets. The FBI connected the breach to North Korea and identified the hackers as operating under the alias TraderTraitor.
Starting Sunday, Binance gradually resumed withdrawals, reporting it had replenished around 95% of the compromised assets, an increase from 90% the previous day. The remaining, less liquid tokens were being acquired via market and over-the-counter transactions.
To cover the losses, Binance is drawing from its corporate treasury, the SAFU fund, and a portion of its futures insurance reserve.
Binance's SAFU policy involves ongoing monitoring and rebalancing of the fund's market value to maintain financial stability.
The policy states that should the fund’s market value drop below $800 million due to Bitcoin price fluctuations, Binance will rebalance it back to $1 billion.
However, the SAFU policy does not specify any deadlines for replenishing funds spent following security breaches.
Binance did not immediately provide further details about the current status of SAFU reserves, additional fund deployments, or plans for replenishment when approached by Cointelegraph.
On Monday, Binance announced that users could verify their balances via a proof-of-reserves snapshot taken on Saturday, following completion of cryptographic verification.
The snapshot confirmed that customer holdings in 10 cryptocurrencies — including Bitcoin, Ether, and USDT — are fully backed on a 1:1 basis.
Binance intends to capture another snapshot on Wednesday covering a wider range of tokens, with cryptographic proof expected to be generated within 40 to 50 hours.
why
This update underscores Binance's prompt financial response and transparency measures after the largest cryptocurrency breach to date, with significant implications for user confidence and industry security protocols.
en_news_stage
Why it matters
This update underscores Binance's prompt financial response and transparency measures after the largest cryptocurrency breach to date, with significant implications for user confidence and industry security protocols.
Prepared from the source material with AI-assisted editing and checked against the supplied facts.
Open original source ↗