21Shares said in an analysis of the Binance hack that Bitcoin dropped only a little more than 2% in the first 24 hours after the Oct. 29 incident, a much smaller move than the roughly 26% decline seen after the FTX collapse in November 2022. The firm described the event as a security failure at a single company rather than an attack on the Bitcoin network itself.
According to the report, the attack was worth about $6.3 billion, with around $3 billion in stolen assets already frozen. Binance said it would cover all losses through its SAFU fund and corporate capital. Based on a Bitcoin price of about $78,509, the 15,000 BTC held in the SAFU fund would be worth roughly $1.18 billion, enough to cover about 36% of the unfrozen losses, with the remainder to be paid by the company.
21Shares also said its physically backed ETP and ETF assets were not affected because they are held in cold storage by third-party custodians including BitGo, Coinbase Custody, Anchorage Digital and Zodia Custody, rather than on exchange accounts. All of its products continue to trade normally.
21Shares said in a report on the Binance hack that the exchange was hit by an attack worth about $6.3 billion on Oct. 29, and that roughly $3 billion in stolen assets has been frozen so far. Binance has pledged to absorb all losses.
In the first 24 hours after the incident, Bitcoin fell a little more than 2%, according to the report. That was well below the roughly 26% drop recorded after the FTX event in November 2022. 21Shares said the latest case was a security breach at Binance as a single company, while the Bitcoin network itself was not attacked.
On loss coverage, Binance said it would use its Secure Asset Fund for Users, or SAFU, together with company funds to make customers whole. Using a Bitcoin price of about $78,509, the 15,000 BTC held in the SAFU fund would be worth about $1.18 billion, enough to cover around 36% of the unfrozen asset losses. The rest would be covered by Binance corporate funds.
The report also said Chainalysis is highly confident the attack was linked to North Korea, though Binance and government agencies have not formally confirmed that attribution.
21Shares added that the assets backing its physically backed ETPs and ETFs are held in cold storage by third-party custodians including BitGo, Coinbase Custody, Anchorage Digital and Zodia Custody, rather than in exchange accounts. As a result, they were not affected by the incident, and all of the firm’s products continue to trade normally.
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