Binance, which was founded in China in 2017, allows users to trade digital assets and is estimated to have more than 300 million registered users worldwide.
The company said in 2024 that it had more than $160bn in assets under its custody.
A lot of the fear right now from Binance users – and the crypto industry at large – is whether or not Binance will actually be capable of covering this enormous financial loss.
The company has said repeatedly that customer funds will be covered and that the firm is strong enough to weather the storm.
But crypto history watchers have been pointing out online that this is exactly the kind of message that FTX CEO Sam Bankman-Fried gave before his crypto exchange collapsed in 2022, leading to huge losses for customers and the industry.
Several experts have warned customers not to regard Binance’s promise to cover losses as legally binding and said they may need to pursue litigation to recover them.
Daniel Tunkel, of the London-based Edwin Coe law firm, said that would “come down to what [customers] have been promised in their contracts”, and “where Binance can be sued for non-performance, if it comes to it”.
Binance has been subject of regulatory scrutiny around the world.
Meanwhile, AI-powered investigations company TRM Labs said that several elements of the attack resembled earlier North Korean-linked incidents, including the Bybit hack.
In the last five years the crypto industry has been beset by enormous losses from hackers.
In nearly all cases investigators have blamed hackers from North Korea, pointing to the infamous Lazarus Group – also know as TraderTraitor. The names refer to clusters of cyber criminals accused of working directly for the regime.
Chainalysis, a crypto analytics firm, said it had “high confidence” that a North Korean is linked to the hack.
North Korea is an impoverished country with very little industry and heavy international sanctions and experts say the regime uses cyber crime as a way to bring money in.
North Korea has always denied this, but the wealth of evidence from cryptocurrency flow analysis and insider interviews from defectors is compelling.
It makes North Korea likely to be the only nation that uses hacking as a way to raise public funds.
