On Friday, Binance announced that it had allocated upwards of $6.34 billion from corporate reserves to address the impact of its security breach, with $5 billion already secured in the identical stolen digital assets.
“The $5 billion is held in the exact token assets that are required. These assets are in Binance custody,” a Binance representative stated to Cointelegraph.
Binance refrained from specifying the exact date these holdings were acquired.
The spokesperson chose not to reveal the specific wallet addresses, pointing to security protocols, but mentioned that these reserves would appear within the platform’s upcoming proof-of-reserves audit, which displays the capital maintained to support client deposits.
Binance explained that it submits weekly statements regarding its corporate funds to the Financial Services Regulatory Authority (FSRA), the regulatory body governing the Abu Dhabi Global Market in the United Arab Emirates. The platform noted that this mandate was established prior to the cyberattack.
The exchange has not yet confirmed which specific digital currencies it still needs to acquire, the timeline for completing those acquisitions, or the exact volume of stolen cryptocurrency successfully recovered.
Related: EIP-7702 didn’t cause Binance hack, but may have amplified losses
The platform verified on Friday that it experienced a $6.3 billion security breach, representing the largest digital asset theft on record. On-chain analytics firm TRM Labs reported that funds were extracted from Binance addresses spanning 10 distinct blockchains on Thursday, attributing the intrusion to the North Korean threat group TraderTraitor.
Binance reported that approximately $3 billion worth of compromised funds had been successfully frozen with the assistance of blockchain collaborators. Those specific holdings were omitted from the corporate reserves designated to absorb the shortfall.
CertiK Awaits Further Data to Validate Binance’s $5 Billion Portfolio
CertiK informed Cointelegraph that additional documentation from Binance is necessary to determine whether the reported $5 billion in matching tokens can be independently authenticated on the blockchain.
Earlier on Friday, CertiK founder Ronghui Gu calculated that roughly $3 billion in locked funds alongside Binance’s $1.17 billion safety reserve could cover about 66% of the disclosed losses, leaving an estimated shortfall of $2.1 billion.
Gu noted that this projected gap accounts for roughly 1.3% of Binance’s published exchange reserves totaling $165 billion. Those total reserves encompass the assets supporting customer balances.
Binance Founders Point to Operating Income and Existing Assets
Blockchain intelligence firm Nansen told Cointelegraph that it could not independently confirm what liquidity Binance maintains outside of its roughly $1.16 billion safety fund or where capital for the remaining deficit will originate.
Binance creator Changpeng Zhao stated on Friday that the enterprise’s equity in SpaceX alone, tied to a $500 million contribution toward Elon Musk’s acquisition of Twitter, exceeded $1 billion in value.
Binance co-creator Yi He noted that the trading platform’s earnings for the year were adequate to absorb the breach losses, rendering the liquidation of its SpaceX stake unnecessary.
Zhao additionally remarked that Binance accumulates the digital assets it supports because users frequently pay trading commissions in those specific currencies. In a separate publication, he mentioned that Gulf, Binance’s strategic ally in Thailand, had extended financial backing.
Zhao, who stepped down from his role as chief executive in 2023 and subsequently completed a four-month sentence in an American correctional facility relating to anti-money laundering infractions, continues to hold a substantial ownership stake in Binance. Forbes valued his net worth at approximately $115 billion.
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Originally published at https://cointelegraph.com/news/binance-5-billion-replacement-crypto-in-custody?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound.
