Binance stated that in the reserve proof snapshot on October 31st, user USDT's holdings decreased by 7.95%. Despite the cryptocurrency exchange experiencing a security vulnerability incident involving $6.3 billion, Binance continues to restore its services.
- On October 31, a snapshot of Binance's reserves showed that user USDT's holdings decreased by 7.95% to 29.483 billion coins.
- Ethereum holdings decreased by 3.80%, while Bitcoin balance increased by 0.52% to 692,187 BTC.
- The latest report covers 10 major assets, while the snapshot from October 1st covers 55 assets.
- Binance stated that within the first 9 and a half hours after resuming services, there was a net outflow of $3.64 billion.
- The exchange expects that a complete zero-knowledge proof will be available on November 3rd.
According to the Binance Reserve Proof page, the balance of USDT has decreased by 2,544,682,319 to 29,483,062,742 USDT. During the same reporting period, holdings of Ethereum and BNB also decreased, while the balance of Bitcoin recorded a slight increase.
The snapshot date of this report is October 31st, which predates Binance's resumption of withdrawals on November 1st. At the time of this report's release, there were concerns in the market regarding the exchange's asset coverage and the flow of customer funds.
Binance USDT balance decreases, Bitcoin holdings increase
The latest snapshot shows that Binance reported an increase of 3,614 BTC in its Bitcoin holdings, a growth of 0.52%, reaching 692,187 BTC.
Ethereum balances, on the other hand, moved in the opposite direction, decreasing by 144,217 ETH, a drop of 3.80%, to 3,654,919 ETH.
At the same time, BNB's holdings decreased by 401,669, a decrease of 0.93%, to 42,638,276 BNB.
Among these four assets, USDT recorded the largest percentage decline, with its balance falling from nearly 32.03 billion to 29.48 billion.
These data compare the balances recorded on October 1st and October 31st, and do not represent withdrawals that occurred after Binance resumed services in November.
According to the published data, the reserve coverage rate of Binance’s USDT has dropped from 103.88% to 100.00%.
This means that as of the snapshot on October 31st, the USDT reserves mentioned in the report matched exactly with the corresponding account balances; earlier in the same month, the reserves were even 3.88% higher.
Bitcoin coverage rate is 100.04%, while BNB remains at 101.30%.
The number of cryptocurrencies covered in Binance's reserve report has decreased.
The report on October 31 listed 10 major cryptocurrencies, while the snapshot from October 1 covered 55 assets.
The latest set of assets includes BTC, ETH, USDT, BNB, SOL, USDC, XRP, USD1, RLUSD, and ZEC.
Following this security incident, the reduction in the scope of coverage has raised questions from the outside world regarding the visibility of balances of other cryptocurrencies.
In its update on the progress of recovery, Binance explained that all 10 listed assets have been fully replenished.
The company stated that the liquidity of the remaining affected assets is poor, and further purchases are needed through exchanges and over-the-counter markets.
However, this explanation does not prove that there are missing amounts of other cryptocurrencies in the customer accounts, nor does it prove that these amounts were intentionally concealed.
The exchange stated that it takes approximately 40 to 50 hours to generate a complete zero-knowledge proof.
As previously reported by crypto.news, Binance will advance the reserve verification process in tandem with the preparations to reopen withdrawals.
A complete proof is expected to be released on November 3rd. At that time, customers who hold the relevant covered assets will be able to verify whether their account balances have been included in the calculation.
After the withdrawal restrictions were lifted, over $4 billion flowed out of Binance.
After being attacked on October 29th and having its services suspended, Binance began to resume cryptocurrency withdrawals on November 1st.
The exchange initially resumed Bitcoin withdrawals, and then gradually restored access to Ethereum, USDT, USDC, and other supported assets.
In the operational update on November 1st, Binance stated that between 06:00 and 15:30 on UTC, a total of $4.649 billion in withdrawals and $1.01 billion in deposits were processed.
The difference between the two means that there was a net outflow of nearly $3.64 billion within these 9 and a half hours.
Binance stated that this net flow is equivalent to 2.1% of its reported assets of $171 billion.
Analyst CryptoQuant and Darkfost stated that there was a large-scale outflow of cryptocurrencies after withdrawals resumed.
According to his data, this includes 19,569 BTC, valued at nearly $1.5 billion; as well as 154,147 ETH, valued at nearly $360 million.
In terms of stablecoin liquidity, this includes withdrawals of $1.96 billion USDT and $557 million USDC.
However, these numbers describe the changes in funds after withdrawals were reinstated and should not be considered as the changes recorded in the reserve snapshot on October 31st.
Recovery of withdrawals will be carried out in phases, initially covering some assets on 15 blockchain networks; other services are still awaiting the completion of security checks.
Analysts evaluate Binance's withdrawal situation after a $6.3 billion hacker attack
Cryptography analyst MaxiCalls commented on the situation of Bitcoin flowing out after Binance resumed withdrawals.
The analyst estimates that within the first 12 hours, approximately 16,000 BTC units flowed out of the exchange, which accounts for about 2.4% of its Bitcoin reserves.
MaxiCalls believes that this capital flow does not necessarily imply widespread panic, and points out that Binance has resumed withdrawals and has pledged to cover customers' losses.
However, this judgment still falls within the realm of analysts' interpretation of exchange capital flows and cannot confirm the specific reasons for individual customers' withdrawals.
Meanwhile, after the security vulnerability incident, Binance has begun to use company funds, Bitcoin, and Ethereum to purchase alternative assets.
The exchange stated that as of November 1st, nearly 95% of the affected assets had been replenished, and they will continue to purchase the remaining tokens.
Binance promises to absorb the financial losses caused by this attack. The sources of funds include company resources, its SAFU emergency fund, and part of the futures insurance fund.
