Binance founder says hacks 'inevitable,' vows user funds protected after $6.3B breach

In online interview with Nikkei, Zhao says industry will emerge 'stronger and safer'

Changpeng Zhao, founder of the world's largest cryptocurrency exchange Binance, said hacking is inevitable and that the industry will emerge stronger and safer in the wake of the recent breach. [Getty Images]

Changpeng Zhao, founder of Binance, the largest cryptocurrency exchange in history, said the industry will emerge "stronger and safer" following a recent hacking incident.

In an online interview with the Nikkei published Monday, Zhao addressed the recent asset breach, saying "user assets are protected through funds such as the customer protection fund" and that "hacking itself is unavoidable — what matters is how you respond when it happens."

Binance suffered a hack attributed to a North Korean hacking group late last month, with losses estimated at about $6.3 billion. Both Binance's internal probe and an FBI investigation point to the North Korean group as the perpetrator.

Binance has since reimbursed most customer losses through its emergency fund and similar reserves. Even so, customers withdrew a total of $10.97 billion in the 46 hours following the hack, reflecting deep market distrust.

Zhao said user assets would continue to be protected through the Secure Asset Fund for Users, or SAFU, an emergency reserve Binance built internally. Responding to criticism that cryptocurrency is repeatedly exploited for money laundering and concealing criminal proceeds, he said exchanges "are working hard on security measures, including anti-money-laundering," adding that they are "subject to stricter oversight than banks from regulators" and that "compliance with regulation is entirely achievable."

Zhao founded Binance in 2017 and was indicted in 2023 on charges including violations of anti-money-laundering regulations. He pleaded guilty and paid $4.3 billion in fines and forfeitures, and stepped down as CEO.

After US President Donald Trump returned to office, Zhao lobbied for a pardon, and both he and Binance received pardons in October last year. He has not, however, returned to an active management role.

In the interview, Zhao said he has no immediate plans to return to the helm. "Right now, I have no intention of going back," he said.

kate01@heraldcorp.com