Binance’s effort to fully compensate users affected by its $6.34 billion security breach is facing liquidity and execution challenges, as the cryptocurrency exchange moves to purchase the remaining affected digital assets through market and over-the-counter channels.
The company said it had reserved more than $6.34 billion in corporate funds to cover losses from the incident, with approximately $5 billion already held in the exact tokens affected by the breach. It is purchasing the outstanding amount to match the required token assets and address shortfalls.
Binance said the process could take longer because some affected tokens have limited market liquidity, while over-the-counter transactions require additional settlement time.
The challenge highlights a less visible risk in large-scale cryptocurrency security incidents: having sufficient financial resources does not necessarily mean an exchange can immediately source equivalent quantities of every affected digital asset without encountering market constraints.
Read also: Binance freezes withdrawals after $6.3bn record crypto heist
Unlike cash compensation, replacing stolen cryptocurrency requires access to the specific tokens involved. Where trading volumes are low or market depth is limited, acquiring substantial quantities can become more complicated and potentially expose buyers to price movements and execution costs.
Binance said it would continue using company resources to cover confirmed shortfalls and provide further verified updates as purchases progress.
The exchange also disclosed that approximately $3 billion in affected assets had been frozen or protected through cooperation with industry partners. These funds are separate from the $6.34 billion compensation provision and remain subject to recovery and verification efforts involving law enforcement, blockchain intelligence firms, token issuers and other industry participants.
The distinction is significant because freezing cryptocurrency does not automatically mean the assets have been recovered or returned to their rightful owners. Their eventual recovery depends on tracing, verification and coordination with the relevant platforms and authorities.
Binance’s investigation has also widened beyond its initial suspicion that a compromised laptop may have been involved. The company said subsequent investigations uncovered additional points of breach, describing the incident as a complex attack.
Meanwhile, the exchange said it remained on track to resume withdrawal services within its expected 45-hour timeline after suspending withdrawals to stop further outflows. Deposits remained unaffected.
The incident puts renewed attention on the financial and operational risks facing centralised cryptocurrency exchanges, particularly their ability to maintain liquidity, protect customer assets and manage large-scale security failures across multiple blockchain networks.
Binance said all losses would be covered through its Secure Asset Fund for Users (SAFU) and corporate funds, adding that users’ funds remained safe.
The company also promised to verify user funds publicly through its Proof of Reserves mechanism as recovery efforts progress, a commitment that will be important in restoring confidence following the breach.
Royal Ibeh is a senior journalist with years of experience reporting on Nigeria’s technology and health sectors. She currently covers the Technology and Health beats for BusinessDay newspaper, where she writes in-depth stories on digital innovation, telecom infrastructure, healthcare systems, and public health policies.
