Binance completes zero-knowledge reserve proof for 10 tokens after $6.3B breach
In brief
- Binance completed zero-knowledge Proof of Reserves for 10 tokens, including Bitcoin, Ethereum, USDT and BNB.
- Binance says it has replenished about 95% of assets hit in the October 29 breach.
- Remaining 5% is less liquid tokens still being bought through market and OTC trades.
- Binance plans another reserve snapshot covering more tokens on November 4.
What the proof covers
The verification covers ten assets: Bitcoin, Ethereum, USDT, BNB, Solana, USDC, XRP, USD1, RLUSD and Zcash. Binance had already said these were fully backed after it replenished the affected assets with company funds.
Users can check their holdings through Merkle trees. Binance says these let customers confirm their balance was in the October 31 snapshot without exposing individual account information, while zero-knowledge proofs show the covered assets are backed by sufficient reserves.
It's a narrow check.
By Binance's own description, the verification applies only to those ten assets at snapshot time and isn't a comprehensive financial audit of the exchange.
Where the recovery stands
According to the fifth recovery update, Binance has replenished about 95% of impacted assets, up from 90% on October 31. The remaining 5% is less liquid tokens the company is still acquiring through market and OTC transactions (Binance said limited liquidity makes them harder to source in the required quantities).
Binance said it initially committed more than $6.34 billion in company resources to cover losses, including about $5 billion held in the specific cryptocurrencies affected. An earlier update said the effort drew on its Secure Asset Fund for Users, its Futures Insurance Fund and its corporate treasury.
The exchange also said it worked with law enforcement, blockchain intelligence firms and token issuers to freeze about $3 billion in assets linked to the attack. Those frozen assets are separate from the funds set aside for customer balances.
“Binance will absorb the financial impact of the stolen funds, not our users,”
What's next
Binance began restoring withdrawals across 15 networks on November 1, including Bitcoin, Ethereum, BNB Chain, Solana and Tron. It plans to expand withdrawals to more networks and assets starting November 3, and to take another reserve snapshot covering more tokens on November 4. The exchange expects the matching zero-knowledge proof to take roughly 40 to 50 hours to generate.
On the cause, Binance's initial findings pointed to a compromised employee laptop, though later investigations found additional points of compromise. The company has said it found no evidence that wallet private keys were leaked, and it's committed to publishing a detailed technical report on the attack and the security measures it put in place in response.
Frequently asked questions
Which tokens does Binance's zero-knowledge Proof of Reserves cover?
The verification covers ten assets: Bitcoin, Ethereum, USDT, BNB, Solana, USDC, XRP, USD1, RLUSD and Zcash. Binance said its next reserve report will cover more cryptocurrencies as it keeps replacing the remaining affected assets.
Is Binance's Proof of Reserves a full audit of the exchange?
No. Binance says the verification applies only to the ten covered assets at the time of the October 31 snapshot and is not a comprehensive financial audit of the exchange.
How can Binance users verify their balances?
Binance says users can check their holdings through Merkle trees, which confirm a balance was included in the October 31 snapshot without exposing individual account information. Zero-knowledge proofs are used to verify the covered assets are backed by sufficient reserves.
