Binance has faced US$4.72 billion in net outflows since reopening after its US$6.3 billion hack, as rival exchanges gain trading market share.
Binance has seen US$4.72 billion in net customer outflows since reopening withdrawals following a major cyberattack last week that resulted in more than US$6.3 billion of cryptocurrency being stolen.
The exchange suspended deposits and withdrawals for more than two days following the attack before reopening withdrawals on Sunday morning. While the exchange has faced substantial outflows, analysts and industry experts said the fallout appeared limited so far.
The hack also caused Binance to lose trading market share to rivals Coinbase, OKX, and Kraken, with its share of crypto trading falling to its lowest level in at least 12 weeks.
The exchange revealed that the attackers used social engineering and malicious software to gain access to its systems. The hackers approached an engineer via LinkedIn and arranged a series of fake job interviews. The employee downloaded an assignment containing malicious software, which allowed the attackers to compromise the company’s systems.
The FBI has attributed the attack to North Korea-linked hacking group TraderTraitor, which was supported by investigation efforts from blockchain analytics firms Elliptic and Chainalysis. North Korea has rejected the allegations, describing the FBI’s attribution as a ‘grave political provocation’.
Binance has maintained that it will absorb the financial impact of the stolen funds, and has mobilised US$6 billion from its corporate treasury, insurance fund, and reserves set aside for security breaches to cover the losses. The exchange states that it is also working with industry partners to acquire the outstanding assets.
Ed Goh, Head of Trading, B2C2, commented: “So far today, trading volumes and liquidity appear to have returned to normal levels, coinciding with the resumption of withdrawals. The question now is whether that recovery holds and trading activity remains stable over the coming weeks.”
The outflows and declining trading share indicate that the incident has affected activity on the exchange, although its financial consequences for the wider crypto market appear limited so far.
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