Kathmandu. Assets worth $6.3 billion have been stolen from Binance, the world’s largest cryptocurrency trading company. There is no information about any insurance company providing compensation for this huge loss.
Binance has said that it is covering the stolen assets from its own funds. This raises the question, how useful is insurance if digital assets are stolen?
Cryptocurrency is a type of internet-based digital currency. It can be bought and sent online. Bitcoin is a well-known example. Binance offers the convenience of buying and storing these currencies.
On October 29, hackers attacked Binance. According to American blockchain analytics firm TRM Labs, most of the assets were withdrawn from 10 blockchain networks within about 20 minutes. Binance’s investigation has revealed several attack methods, including an attack on an employee’s laptop. However, the full investigation into the attack is not yet complete. The FBI has blamed a North Korean hacker group called TradeTritor for the incident.
On October 30, The Insurer quoted a source close to Binance as saying that the company does not have cyber insurance. The source claimed that there is no separate insurance or reinsurance coverage for its emergency fund.
However, Binance has not officially confirmed this. The company has a separate insurance for its directors, but it does not cover stolen assets.
Cyber insurance covers specific damage caused by an attack on a computer or online systems. According to Reuters, this type of insurance can include research, legal expenses, and some losses that occur when the business is closed. However, it usually does not cover the full value of the stolen crypto assets. This requires a special type of insurance.
Similarly, the compensation received depends on the terms and conditions of the insurance.
According to Binance, the company used its own funds to buy about $6 billion worth of other crypto assets. It covers about 95 percent of the stolen assets. The remaining 5 percent is being repaid.
In addition, according to Binance, the company has collaborated with several institutions to identify and seize stolen assets worth $3 billion. However, not all of the seized assets have been recovered. The exact amount of the money returned is still unknown.
To compensate for the loss, Binance used its emergency fund, the Secured Asset Fund for Users, the Futures Insurance Fund, and the company’s own funds. The company said it would use half of the $1 billion SAFU fund. The fund was created to compensate customers for losses incurred during the crisis.
The Futures Insurance Fund is also Binance’s own fund. However, it has the word ‘insurance’ in its name. It is not a policy offered by any insurance company. Binance has promised to restore the SAFU fund to its original state.
Meanwhile, on Nov. 1, Binance began a phased relaunch of 15 types of crypto assets, including Bitcoin. According to Reuters, customers later withdrew $3.64 billion more than their deposits. However, on Nov. 2, Binance said that despite the initial increase in withdrawals, the situation has returned to normal. The company claims that customers’ funds are safe and that they will not suffer any financial losses as a result of the theft.
It is also difficult for international insurance companies to insure such a large loss. According to Joseph Ziolkowski, chief executive of specialty insurance company Realm, insurance coverage for the direct theft of digital assets is still limited. Only a few specialty insurance companies in London and Bermuda offer such services. Reinsurance can divide risk among many entities, but it is not always possible to get enough insurance to cover the full loss.
According to TRM Labs, crypto assets worth $287 million were stolen in 150 cyberattacks worldwide in 2025. Of these, $146 million was stolen from a company called Bybit. This single theft from Binance is more than double the total theft last year. Such incidents can increase the demand for digital asset insurance. However, insurance companies may be more cautious considering the risk of large losses. – Agency
