- Customers pulled money but did not stampede. Binance said it processed $4.65 billion in withdrawals and $1.01 billion in deposits between 6 a.m. and 3:30 p.m. UTC on Nov. 1, for net outflows of $3.64 billion after it reopened withdrawals following last week’s record hack.
- The drain is modest relative to the balance sheet. The net outflows equal 2.1% of Binance’s $171 billion in total assets, based on its latest proof-of-reserves data as of Oct. 28, and the exchange said withdrawal volumes declined and stabilized after an initial spike while deposits remained substantial.
- Recovery efforts are advancing. Binance said it has now covered about 95% of the impacted amount, up from 90% in its previous update, with the remaining 5% made up of less liquid tokens that will take longer to source, and Circle said it has frozen more than $1.1 billion in USDC tied to the incident, up from the more than $800 million CEO Jeremy Allaire cited Friday.
- Binance is betting on trust. Founder Changpeng Zhao wrote on X that “98% choose to stay!” and said most net outflows came within the first couple of hours, while the exchange has pledged to absorb the losses rather than pass them on to users.
What Happened?
Binance began restoring withdrawals in phases at 6 a.m. UTC on Sunday, and services had resumed across all 15 networks and assets in the initial phase by 12:36 p.m. UTC, with testing continuing for the remaining networks. The reopening follows the record $6.3 billion hack of the exchange last week, which the FBI attributed to North Korean hackers in an operation it identified as TraderTraitor. Circle said it activated its incident response procedures and coordinated with law enforcement on the freeze, and that the investigation is ongoing.
Why It Matters?
The first day of withdrawals was the real test of confidence in the world’s largest crypto exchange, and a 2.1% net outflow suggests a large run was avoided, at least initially. That matters for the wider market because a disorderly bank-run dynamic at Binance could have forced asset sales and stablecoin redemptions across crypto. The growing size of the stablecoin freezes also shows issuers such as Circle are becoming an important line of defense when hacks occur, which supports the case for regulated stablecoins.
What’s Next?
Watch whether outflows stay contained as Binance reopens its remaining networks and assets, and how quickly it sources the final 5% of less liquid tokens. Further freezes or recoveries of stolen funds would reduce the hole Binance is filling with its own resources. Any renewed spike in withdrawals, or new details on how North Korea’s TraderTraitor group breached the exchange, could weigh on sentiment again.
Affected Tickers and Coins: BNB, BTC, USDC, CRCL
Source: CNBC
