Binance News Update | Richard Teng: Binance Will Cover All Hacked Losses With Company Funds, $6.34 Billion Reserved and $5 Billion Already Held in the Affected Tokens
Binance CEO Richard Teng said the exchange will cover all losses from its security incident with company funds, having reserved more than $6.34 billion, $5 billion of which is already held in the exact tokens affected, including USDC, USDT, BTC, ETH and BNB. In a video message to users posted on X on Friday, October 30, Teng said customer funds were not affected, and shared new details about how the attack was carried out.“I want to be clear: we are committed to covering all hacked losses through our company funds,” Teng said. “Your assets are safe.”Built for the Long TermTeng said Binance can absorb a loss of this size immediately because of how it manages its own earnings. “Binance has always been built for the long term,” he said. “Most of what we earn from day-to-day operations is held in crypto assets. We have kept a lot of them in the company, and reinvested them — into the business, and into security. Because we believe in crypto, and in the long-term value of this industry.”That is why most of the affected tokens are already covered, Teng said. Binance is buying the remaining amount through market and OTC channels, and “the good news is that we are recovering stolen assets for users.”Customer Funds Were Not AffectedTeng addressed the question many users have been asking: how Binance can show their assets were not affected. “We never use any customer funds, so they are not impacted,” he said. “What was affected in this incident was Binance’s own hot wallet.”Under Binance’s security setup, most user assets are held in cold wallets and moved to a hot wallet only when a user makes a withdrawal. Teng encouraged concerned users to check their account balances and contact customer service with any questions.How the Attack Was Carried OutTeng said the attack was complex and not carried out by one person. Binance’s first findings pointed to a compromised laptop, and further investigation has uncovered additional points of breach.The attackers used EIP-7702, an Ethereum standard that lets a wallet delegate its execution to smart-contract code, to obtain on-chain execution approval over a Binance hot wallet. “That delegation did not pass through our normal approval controls,” Teng said. “That’s why we need to pause the withdrawal service to investigate, rebuild and retest the entire infrastructure system.”The attackers also used a self-destruct mechanism that “destroyed tooling and traces as they went,” he said, making the investigation harder. Binance is working with law enforcement, blockchain intelligence firms, token issuers and other exchanges to trace and recover the stolen funds, and about $3 billion has already been frozen with partners’ help. “We will do everything within our power to ensure that these bad actors will be held accountable,” Teng said.Withdrawals Expected Before SundayBinance is rebuilding its withdrawal service and will not switch it back on until it passes rigorous testing. “We are very hopeful that users will be able to withdraw prior to our Sunday deadline, which is on track to be within 40 hours,” Teng said.At the same time, Binance is running a full security review across the company, covering “endpoints, cloud, key management, signing. Everything.”Proof of Reserves by MondayOnce the remaining token purchases are complete, Binance will verify user assets through its Proof of Reserves. A full report is due by Monday, with an initial view possibly before then.Teng thanked industry partners, law enforcement and, “most of all,” users for their patience. “We will weather this storm,” he said. “Thank you for the support, and stay safe.”
