SINGAPORE – A multibillion-dollar hack at Binance has renewed concerns about the safety of keeping digital assets on exchanges, although crypto may still appeal to investors who understand and are able to manage those risks.
About US$6.4 billion (S$8.2 billion) worth of cryptocurrencies was stolen on Binance within 30 minutes on Oct 29, with attackers linked to North Korea draining the platform’s internet-connected “hot wallets”, then rushing to exchange stolen stablecoins for cryptocurrencies such as Ether.
The hackers made off with more than four times the US$1.5 billion stolen from crypto exchange Bybit in February 2025, which was then the largest cryptocurrency heist on record.
Binance subsequently managed to freeze about US$3 billion of the stolen funds. It also said on Nov 1 that it has covered about 95% of the amount stolen using a combination of its corporate treasury, part of its “secure asset fund for users”, as well as its futures insurance fund, while maintaining the remaining fund balances “above required risk-management levels”.
Binance’s customers have withdrawn a net US$4.72 billion from the world’s biggest cryptocurrency exchange since it reopened for trade on Nov 2, or around 3% of the assets on its platform.
Experts said Binance’s efforts to freeze billions in stolen funds helped limit the damage, but the speed and scale of the attack have shaken confidence in centralised exchanges, where investors keep their assets for ease of trading.
Justin d’Anethan, head of research at private markets advisory firm Arctic Digital, said investors are likely to have “mixed feelings”.
While Binance showed that it is able to work quickly with industry partners and authorities, the theft of billions in under 30 minutes after a single computer was compromised has raised questions about exchanges’ ability to safeguard customer assets.
“The scale says a lot about where the industry is: there’s now enough value sitting in a handful of places that attackers will spend months preparing for a half-hour window,” he said.
“It shows centralisation is a weakness. One compromised machine at one company and billions can be moved across blockchains and borders before anyone has finished their coffee.”
Eric Jardine, head of research at blockchain analytics firm Chainalysis, said Binance’s success in freezing about US$3 billion of the stolen funds demonstrated how transparency and cooperation across the cryptocurrency industry has helped limit the damage from such attacks.
But frozen funds are not the same as recovered funds, nor does it diminish the sophistication of the attack, he noted.
An analysis of cryptocurrency transaction records showed that attackers had found ways to manipulate Binance’s systems into transferring funds to addresses under their control.
In some cases, the attackers altered the instructions governing the release of funds, while initiating transfers that appeared to be legitimate transactions authorised by Binance in others.
As such, cryptocurrency exchanges remain attractive targets for hackers because of the substantial funds they hold, regardless of where they are based, said Jardine.
“This is not a simple question of centralisation being bad or decentralisation being safe… Different ways of holding crypto carry different security risks,” he added.
The Binance incident is a reminder that cryptocurrency platforms must continually strengthen their security measures to guard against increasingly sophisticated attacks, including those carried out by state-backed hackers, said Angela Ang, managing director for Asia-Pacific and president of Singapore at digital asset custodian BitGo.
“Every model, centralised or decentralised, carries risk,” she said.
Ang added that cryptocurrency platforms should adopt multiple layers of security, including requiring approval from several parties before funds can be moved, imposing strict controls over transactions and keeping most assets in cold storage, away from day-to-day operations.
Cold storage refers to keeping the private keys, or digital credentials, used to access cryptocurrency offline, making them less vulnerable to online hacking attempts.
Still, cryptocurrency can be a viable investment for those who take the risks of holding assets on exchanges seriously.
Dan Khus, chief analyst at LVRG Research, said investors should limit their exposure to individual platforms and consider holding larger amounts of cryptocurrency in their own wallets while diversifying their investments.
“Market direction will likely hinge on whether risk appetite stabilises in the days ahead, influenced by any further security updates and broader macro developments such as rate expectations and equity market moves,” said Khus.
Bitcoin was trading at around US$ 80,000 on Nov 5, bouncing back by around 4% over the past 24 hours, while Ether rose over 6% to around US$2,400.
