CZ Says Less Than 10% of Binance Withdrawals Went to Other Centralized Exchanges

Binance founder CZ said less than 10% of funds withdrawn after an attack on the exchange went to other centralized platforms, as users weighed where they could hold their assets more safely.

CZ said most of the withdrawn funds may have moved to self-custody wallets. He cautioned that users who manage their own holdings need to back up their seed phrases and protect them from loss or damage. He also said many self-custody losses do not result from hacking.

CZ pointed to attacks involving hardware wallet supply chains and seed phrase generation. He said users could lose their assets years after buying a hardware wallet and generating a seed phrase, even if they followed security practices and made no mistake. He added that no institution would cover such a loss.

CZ said Binance had repaired the attack and covered the resulting losses. He said he had not lost funds on Binance himself because the exchange covered the losses. He described the initial attacks as a first wave and warned that a later wave could affect smaller platforms that may not be safer.

Some large institutions withdraw funds after attacks because of internal policies, CZ said, and retail users may follow them. He said users may then reconsider where to keep their assets after taking on the responsibility of self-custody.

CZ said a post he had just seen showed Binance’s hourly flows had turned to net inflows within 24 hours. He described the shift as a sign of the platform’s strength and user trust, while warning that flows could remain volatile over the coming weeks and months. He said Binance could see more inflows if the market returns to a bull phase.

CZ urged crypto industry participants to invest more in security by hiring security engineers, adopting AI security tools and working with AI security providers. He said many AI security tools had not yet been used across the industry. For retail users, he recommended learning about security tools, how to protect their assets and developments in the industry.