Binance Sets Aside $6.34bn for Users After Freezing $3bn in Stolen Crypto

Binance has earmarked more than $6.34 billion of company funds to compensate users affected by a major security incident. The exchange also said about $3 billion in affected assets has been frozen with help from industry partners.

In an update released on Friday, October 30, Binance said it is working with law enforcement agencies, blockchain intelligence firms, token issuers and other industry stakeholders to trace and recover more assets. The incident had earlier been linked to about $6.3 billion in financial losses after Binance temporarily stopped withdrawals.

Reserved funds and token purchases

Binance said more than $5 billion of the reserved funds is already held in the same cryptocurrencies affected by the security incident. It is buying additional tokens through conventional market transactions and over-the-counter channels to cover outstanding shortfalls.

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

Binance said matching the original assets would help ensure affected customers receive compensation in the appropriate cryptocurrencies, not unrelated digital tokens. It warned that the process could take more time because some cryptocurrencies have limited market liquidity.

$3bn frozen, recovery not automatic

The exchange disclosed that approximately $3 billion in affected assets had been frozen through cooperation with industry partners. The frozen funds are separate from the $6.34 billion already reserved by Binance to cover customers’ losses.

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

Freezing crypto assets does not automatically guarantee recovery. Further investigations and legal processes may be required.

What it means for Nigerian traders

For Nigerian cryptocurrency traders using international exchanges, the update highlights the need for security safeguards and clear compensation arrangements. Binance said it would use corporate resources to cover verified shortfalls while it continues recovery efforts. It also promised more updates as investigations and recovery operations progress.

Binance said customers will eventually be able to verify their holdings publicly through its proof-of-reserves system. The company has not specified when the entire recovery exercise will be completed or when all affected customers will receive compensation.

Binance’s co-CEO Richard Teng had earlier said the exchange would cover all losses using its Secure Asset Fund for Users (SAFU) and company resources, assuring customers that their funds remained safe.