Binance hot wallet hit in $6.3 billion hack, exchange says user funds safe
Security & Exploits ·
Co-CEO Richard Teng says customer assets were unaffected because most holdings sit in cold storage, and Binance will cover losses with company funds.
Binance's own hot wallet was compromised in a hack worth roughly $6.3 billion, Richard Teng said on October 30, while telling users that customer funds were not touched. According to his account, the bulk of user assets remains in cold wallets and is only shifted into hot wallets when withdrawals are processed, which is why the breach did not reach client balances.
Teng said Binance has set aside more than $6.34 billion to cover the incident entirely from company funds. Of that, $5 billion is already held in the same assets affected by the hack — USDC, USDT, BTC, ETH, and BNB — meaning Binance does not need to acquire the full replacement amount from scratch. The remaining tokens are being sourced through a mix of open-market purchases and over-the-counter transactions, according to the report.
The structure Teng described reflects a standard exchange practice of segregating the majority of custodied assets in cold storage, with only operational liquidity kept in internet-connected hot wallets for processing withdrawals. That separation is what allowed Binance to frame the breach as a loss to the exchange's own balance sheet rather than to depositors.
To address lingering questions about whether Binance's reserves can actually absorb the shortfall, Teng said the exchange plans to publish an initial Proof of Reserves on Monday, intended to let users verify asset backing independently rather than rely solely on company statements.
What remains unclear from the available material is how the roughly $6.3 billion hot-wallet loss figure was calculated relative to the $6.34 billion set aside, how the open-market and OTC purchases of remaining tokens will affect prices for BTC, ETH, and BNB in the near term, and what the Proof of Reserves release will show once published. The incident is based on a single statement from Binance's leadership, and independent confirmation of the loss amount and reserve coverage has not yet been reported.