“If this can happen to Binance, it can happen to anyone.”
Binance CEO Richard Teng explains the reality of cybersecurity and how Binance is handling the incident.
Richard: We are spending huge amounts of money on security every year, So if something like this can happen to us, it can happen to everyone.
I think what is fortunate in this episode is that, you know, we bear the full financial impact and users are not compromised. We have set aside more than 100 % of the funds and replenished the tokens that's affected.
And we continue to build from strength to strength.
We want to, I mean, all these hacks and attacks can happen to any platform. What sets us apart is how we continue to protect users on that front and learn from this episode and become much stronger.
CNBC: Well, I mean, after FTX, that was the promise as well. The industry promised to be more transparent, to be more secure, to be more ready for prime time. And I think now that question is raised again.
Richard: Well, so FTX and us are very different. So the comparison doesn't quite hold there. I mean, FTX was the case of fraud. The customer's money wasn't there.
We did pause for a while to make sure that to protect the money, the customer's money is there. And we reopened very quickly after that. Once we rebuild the system, we are confident in our system. And we have started to allow customers to withdraw their funds from Sunday.
Initially, we saw a spike, but by now... it has normalized. And if you look at hourly net inflow and outflow, it's what we see on a normal day.
And customers can verify the assets through the proof of reserve, which during FTX time they cannot. And that's the difference. Verification, not just promises.
CNBC: So all the withdrawal restrictions are lifted now. Customers can take out whatever they want from Binance?
Richard: I think we have allowed for withdrawal of the different tokens and they're phasing pretty much by now. It's back to normal.
CNBC: Got it. And you say you've replenished 95%?
Richard: We replenish 98% of the impacted tokens, right? And the remaining 2%, because they belong to less liquid tokens, we need some time to procure them without affecting normal market operations, right? We do not want to go to the marketplace and purchase them, which can affect market prices. So we have to procure them through OTC on that front.
But, you know, those are fully guaranteed. The customer's assets are secured. and we are in the process of procuring them.
CNBC: Got it. Well, thank you certainly for coming on and taking the questions and telling us a little bit about what you've learned and how you're remedying the situation. We appreciate it.