“The biggest hack in history, and the market didn’t crash. But don’t celebrate just yet: this rebound is being driven by leverage, not real money.”
The biggest hack in crypto history has already happened, BTC fell only ~5%, and there was no repeat of an FTX-style collapse. But “not falling hard” doesn’t mean “being safe”: the rebound is being driven by leveraged contracts, not real spot buying.
What happened??
On October 29, Binance’s hot wallet was hacked for around $6.3 billion. The FBI attributed the attack to the North Korean group TraderTraitor. The point of entry was not a private key leak, but a compromised engineer’s laptop, from which “legitimate” withdrawal orders were sent to the system.
Binance’s response: it covered the losses with its own funds, raised compensation to nearly 95%, and about $3 billion in stolen assets have already been frozen.
How’s the market doing now?
BTC: ~$77,000–78,000, about 5% below the pre-hack high. Compared with the FTX collapse in 2022 (which fell 19% in three days), the reaction was much more subdued.
Liquidations: $1.5 billion, of which ~85% were long positions. Here’s the key: those who bought the dip did so mostly with leveraged perpetuals; the spot market didn’t have enough real demand to absorb the sell-off. In Wintermute’s words: the rebound isn’t backed by spot demand.
Withdrawals: net outflows of ~$4.7 billion, about 3% of the platform’s assets. Binance says withdrawals have returned to normal and deposits are recovering.