Binance Reserves $5B in Identical Tokens for Hack Recovery Coverage
The cryptocurrency platform disclosed it has allocated over $6.34 billion in reserves for loss compensation and plans to disclose these holdings in its upcoming proof-of-reserves documentation.
On Friday, Binance announced that it had allocated over $6.34 billion from its corporate reserves to compensate for the losses resulting from the security breach, with $5 billion of this amount already held in the identical digital assets that were compromised.
"The $5 billion is held in the exact token assets that are required. These assets are in Binance custody," a Binance spokesperson told Cointelegraph.
The timing of when Binance obtained these assets was not revealed by the company.
While the spokesperson refused to reveal the specific wallet addresses for security considerations, they confirmed that these holdings will be included in the platform's upcoming proof-of-reserves documentation, which demonstrates the assets maintained to support customer account balances.
According to Binance, the company submits weekly updates regarding its corporate funds to the Financial Services Regulatory Authority (FSRA), which serves as the financial oversight body for Abu Dhabi Global Market in the United Arab Emirates. The platform indicated that this reporting obligation existed before the security incident occurred.
The platform has not yet disclosed which specific tokens remain to be acquired, the timeline for completing those acquisitions, or the total amount of stolen cryptocurrency that has been successfully retrieved.
On Friday, the exchange acknowledged that it experienced a $6.3 billion security breach, representing the most significant cryptocurrency theft in history. According to blockchain intelligence company TRM Labs, the funds were extracted from Binance storage wallets spanning 10 different blockchains on Thursday, and the firm has linked the incident to the North Korean cybercriminal organization TraderTraitor.
Binance reported that approximately $3 billion worth of compromised assets have been immobilized through collaboration with blockchain ecosystem partners. These frozen assets were not included in the calculation of company funds designated to compensate for the losses.