Binance, one of the world’s largest cryptocurrency exchanges, has announced a comprehensive compensation plan to safeguard user assets following a $6.3 billion cyberattack. The exchange stated it has allocated over $6.34 billion in corporate funds to cover the full extent of losses resulting from the attack and has begun replacing affected cryptocurrency assets.
According to an update shared by Binance today, approximately $5 billion of the allocated funds consist of the same assets as the cryptocurrencies affected by the attack. The company plans to cover the remaining approximately $1.34 billion through market transactions and over-the-counter (OTC) purchases.
With this method, Binance aims not only to cover the dollar equivalent of the losses but also to restore the amount of the affected assets.
Binance will buy missing cryptocurrencies from the market.
Binance stated that the purchase process may take longer due to limited liquidity in some cryptocurrencies and the fact that OTC transactions can take time to complete.
The exchange emphasized that it carried out these transactions to protect users’ balances and to rebuild assets affected by the attack.
The company also stated that the $6.34 billion allocated does not include cryptocurrency assets frozen following the attack.
As a result of Binance’s work with blockchain companies, stablecoin issuers, and security organizations, approximately $3 billion worth of assets have been frozen. The exchange continues to cooperate with law enforcement and industry partners to recover these assets.
There May Not Be Just One Security Vulnerability Behind the Attack
Binance’s ongoing investigation has revealed that the attack may have been more sophisticated than initially thought.
Initial investigations suggested that the attackers gained access to the company’s service infrastructure by compromising the computer of a DevOps engineer.
However, subsequent investigations yielded new findings suggesting that the attackers may have exploited multiple access points.
Binance Co-CEO Richard Teng stated that the attackers exploited the EIP-7702 feature on the Ethereum network to gain transaction authorization on the hot wallet. It was also noted that the attackers used certain tools and mechanisms to erase records in an attempt to cover their tracks.
The exchange reiterated that there is no evidence that the private keys of the wallets were leaked.
When Will Withdrawals Be Open on Binance?
Work is underway to resume cryptocurrency withdrawals, which were temporarily suspended following the security incident.
Binance management announced that the withdrawal infrastructure is being restructured and that operations are expected to resume after security checks are completed.
According to Richard Teng’s latest statements, the goal is to resume withdrawals before Sunday, November 1st. However, the exact date will depend on the results of security tests.
*This is not investment advice.
