Who Pays the Bill for Crypto Exchange Hacks After Binance?

A major hack of cryptocurrency exchange Binance resulted in approximately $6.3 billion in stolen assets, with the company pledging to cover customer losses from its own funds and insurance reserves. The incident has raised questions about who ultimately bears the financial burden of such cyberattacks. Binance stated it has allocated over $6.34 billion from company funds, including $5 billion in the same cryptocurrencies that were stolen, to cover the losses. The exchange reported covering 90% of stolen assets as of Saturday, with full coverage for ten currencies including Bitcoin and Ethereum, while noting that less liquid coins may take longer to replace. Compensation costs are typically distributed among company reserves, insurance policies, lenders, and shareholders, with customers potentially bearing part of the burden if rescue efforts fail. The effectiveness of insurance is limited by coverage caps and exclusions, and exchanges may face liquidity tests as customers rush to withdraw funds following major security breaches.