Binance Swallows $5.7 Billion Loss to Shield Users From North Korea's Record Heist
The FBI has confirmed North Korean state ties to the attack, the largest theft in cryptocurrency history.
By Petra Murphy ·
Binance has replaced 90 percent of the $6.3 billion stolen in the largest cryptocurrency hack on record. The exchange announced on Saturday that it has used company reserves to buy back the majority of the missing tokens. Co-chief executive Richard Teng stated that the remaining 10 percent consists of less liquid assets that may take longer to acquire. He assured customers that they would not bear the financial impact of the breach.
The attack occurred on or about October 29, 2026. Investigators believe a group called TraderTraitor executed the theft. Teng described the breach as a complex attack that involved a compromised laptop and malicious software. The software was designed to delete evidence of its activity, making the investigation more difficult. Binance suspended user withdrawals immediately after the incident to maintain stability.
The FBI confirmed on Saturday that the Democratic People’s Republic of Korea was responsible for the theft. The agency identified TraderTraitor as a likely part of the Lazarus Group. This group gained notoriety in 2014 for hacking Sony Pictures. The FBI observed TraderTraitor actors converting the stolen assets into ethereum. The agency expects the assets to be further laundered through decentralized finance and instant swap services.
The FBI urged private sector entities to block transactions involving addresses used by TraderTraitor. The law enforcement agency said it is advising the North Korean government of the theft. This confirmation aligns with earlier suspicions held by private investigators and analysts. The scale of the hack has drawn attention to North Korea’s ability to generate revenue despite extensive international sanctions.
Binance said it set aside approximately $6.34 billion in company funds to cover the losses. The exchange used part of its $1 billion Secure Asset Fund for Users to rebuy the tokens. It also utilized portions of its Futures Insurance Fund and corporate treasury. The company stated its commitment to fully covering the financial impact remains unchanged.
Market reaction was immediate and sharp. Bitcoin fell nearly 5 percent following the news. Ethereum dropped nearly 6 percent, while BNB, the native token of Binance, tumbled nearly 10 percent. The exchange announced on Sunday that some user withdrawals have resumed. These withdrawals are being rolled out in phases to ensure network stability.
The incident has raised concerns among observers about the expanding capabilities of artificial intelligence models. Some worry these models could compromise existing cryptography and IT security protocols. Binance continues to manage the aftermath while the FBI tracks the flow of stolen assets.
