Binance Lacks Cyber Insurance After $6.3 Billion Theft

Binance did not obtain cyber insurance, a gap that may limit insurance recovery as the exchange reimburses users for losses tied to its roughly $6.3 billion hot-wallet theft.

Binance also has directors and officers (D&O) liability insurance for executives who may face regulatory investigations or lawsuits tied to the incident. Similar difficulty obtaining cyber insurance has affected other crypto companies.

Digital-asset firms may pursue claims through crypto-asset, crime and D&O policies, but those policies often contain exclusions. The exclusions may leave a substantial gap between the amount stolen and any insurance payout, which may cover only a small share of losses.

Binance said the asset replenishment would draw on part of its SAFU fund, a portion of its futures insurance fund and company resources. The plan relies on several funding pools rather than insurance alone.

The theft followed an Oct. 30 attack on Binance’s hot wallet. It was described as a record-setting theft in the digital-asset sector.