Binance recorded significant asset outflows following a major security breach on October 29, resulting in both a sharp decline in user-held USDT and notable changes in other reserves. The exchange, one of the world’s largest cryptocurrency trading platforms, reported a net withdrawal of $4.649 billion within about nine and a half hours after reopening withdrawals on November 1.
User Balances and Proof-of-Reserves Snapshot
In its October 31 proof-of-reserves snapshot, Binance showed a 7.95% drop in USDT balances, reflecting a reduction of 2,544,682,319 tokens from the previous month’s snapshot. The remaining user-held USDT stood at 29,483,062,742 following the outflows.
Bitcoin reserves, in contrast, increased to 692,187 BTC, up by 3,614 BTC, or 0.52% over the prior month. Ethereum holdings decreased by 144,217 ETH, or 3.8%, to a total of 3,654,919 ETH. BNB reserves were also lower, dropping by 401,669 BNB, equivalent to a 0.93% decline, with final holdings at 42,638,276 BNB.
USDT saw the most drastic percentage drop among the four largest listed assets, falling from 32.03 billion to 29.48 billion tokens. The USDT reserve coverage ratio slipped from 103.88% to 100%, so Binance’s reserves for this asset now exactly match user liabilities. Bitcoin’s coverage ratio was stated as 100.04%, while BNB coverage reached 101.3%.
| Asset | October 1 Balance | October 31 Balance | Change (%) | Reserve Coverage |
|---|---|---|---|---|
| BTC | 688,573 | 692,187 | +0.52% | 100.04% |
| ETH | 3,799,136 | 3,654,919 | -3.80% | N/A |
| BNB | 43,039,945 | 42,638,276 | -0.93% | 101.30% |
| USDT | 32,027,745,061 | 29,483,062,742 | -7.95% | 100.00% |
Binance included only 10 digital assets in its October 31 report, down from 55 at the start of the month. Assets listed included BTC, ETH, USDT, BNB, SOL, USDC, XRP, USD1, RLUSD, and ZEC. The exchange stated that the most liquid affected tokens had been restored after the security breach, while less liquid tokens were more challenging to replace in large amounts.
Withdrawal Activity Following the Security Incident
Withdrawals recommenced at 06:00 UTC on November 1, as Binance restored access in phases. By 12:36 UTC, asset withdrawals had resumed on all 15 blockchain networks included in the initial phase. During the period from 06:00 to 15:30 UTC, users withdrew $4.649 billion, while $1.01 billion in deposits came in, netting outflows of $3.64 billion—an amount equivalent to 2.1% of the platform’s total reserves based on the October 28 snapshot. Binance observed that withdrawal volumes slowed after the initial rush, while deposit levels remained stable.
During the withdrawal window, more than $4.6 billion in assets left Binance, representing just over 2% of its reserves, according to information shared by the exchange.
On-chain data analysis by CryptoQuant’s Darkfost detailed that 19,569 BTC and 154,147 ETH left the platform, along with $1.96 billion in USDT and $557 million in USDC during this period.
Analyst MaxiCalls also estimated that around 16,000 BTC were withdrawn following the platform’s reopening. Figures for individual customer withdrawals remain confidential.
Asset Recovery and Security Measures
By November 1, Binance reported that it had managed to restore around 95% of the assets targeted on October 29, using its own funds rather than recovering the stolen tokens. These resources included the corporate treasury, the Secure Asset Fund for Users (SAFU), and the Futures Insurance Fund. Binance committed to covering any remaining user asset losses and to purchasing replacement tokens for less liquid assets over time.
Binance utilizes Merkle tree and zero-knowledge proof technology, allowing users to verify that their individual account balances are included in total reported liabilities. An additional proof report for the October 31 snapshot was expected to follow on November 2.
The reduction in the number of assets covered in the latest proof-of-reserves means some assets are no longer detailed in the public report. Binance clarified that this does not indicate missing or hidden user balances but is a result of the reporting scope for this review period.
Mini dictionary: Merkle tree — A Merkle tree is a data structure used in blockchain technology to efficiently verify the integrity and consistency of data. By grouping transaction hashes in a hierarchical format, it allows for quick and secure proof that specific information is included in a larger dataset, such as account balances in exchange reserves.
Binance emphasized that it will use its corporate resources, including SAFU and insurance funds, to fully compensate affected users while continuing to replace less liquid assets as liquidity allows.
