Binance reserves $6.34bn to cover hack losses

Binance has reserved more than $6.34bn in company funds to cover users’ potential losses following a security breach, assuring customers that their assets remain protected.

The cryptocurrency exchange disclosed this in an update on Friday, saying it was working with law enforcement agencies, token issuers, blockchain intelligence firms and industry partners to trace, freeze and recover additional funds.

The company said more than $5bn of the reserved funds were already held in the exact tokens affected by the incident.

“We are completing the purchase of the remaining amount by buying token assets through market channels and OTC channels,” Binance said.

The exchange explained that the process could take longer because some affected tokens had low liquidity, while over-the-counter transactions required additional settlement time.

Binance also disclosed that the $6.34bn reserve was separate from assets already frozen or protected during the recovery exercise.

“Currently, $3bn has been frozen, with thanks to our industry partners. We are working with partners and law enforcement to recover the frozen assets,” the company said.

The exchange had earlier pledged to use its corporate funds to cover losses suffered by users following the security incident.

Reaffirming the commitment, Binance said it would cover all confirmed shortfalls and provide further updates as recovery efforts progressed.

“We will continue to use company resources to cover confirmed shortfall and will provide further verified updates as recovery efforts progress,” it added.

The company further assured customers that users’ funds would ultimately be verified publicly through its proof-of-reserves system.

The latest update forms part of the exchange’s efforts to reassure customers about the safety of their assets and demonstrate its commitment to addressing the security breach.