Binance pledged to cover customer losses after a hack affected more than $6 billion in funds, the cryptocurrency exchange said in remarks carried by Bloomberg Television on Oct. 30.
About half the affected assets had been frozen, preventing their movement, while law enforcement continued pursuing the remainder. The breach was the cryptocurrency industry's largest, Bloomberg Television reported on Bloomberg Brief. The assets being pursued were the portion of the affected funds that had not been frozen.
Binance said it had enough money to compensate customers. That commitment leaves the company responsible for covering losses even if efforts to recover the stolen assets fall short. Its promise to customers therefore did not depend on law enforcement recovering the full amount.
Assets linked to the theft can be flagged on the blockchain, the digital ledger that records cryptocurrency transactions. Those flags make it harder to move or use the stolen funds. The difficulty applies to what those holding the assets can do with them after the theft.
A blockchain intelligence firm attributed the attack to North Korea. The supplied account did not identify the firm, and North Korea's responsibility was not independently established.
The freezing of assets could help Binance recover part of the affected funds. Recovery of the full amount, however, was not guaranteed, and the process could take time. The amount frozen thus did not establish how much of the affected money Binance would ultimately recover.
The company has an insurance fund that could cover some losses. Its current size was unavailable, leaving the amount it could contribute to customer compensation unclear. The existence of the fund alone did not establish how much compensation it could provide.
Binance could also use its own money to meet its commitment. The division between recovered assets, insurance funds and company money had not been established. It remained unclear how much of the customer compensation would come from each of those sources.
The exchange had restricted withdrawals. How quickly it could meet customer requests when those restrictions were lifted remained unresolved, along with how much money customers would seek to withdraw. Both the pace of meeting those requests and the amount requested were therefore still unclear.
The pledge to compensate customers did not establish when all affected funds would be recovered or how much of the stolen money law enforcement would retrieve.
