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What to know about keeping your coin safe
CNBC • • general
Key Points:
- Binance, the world's largest crypto exchange, was hacked on Oct. 29 with an estimated $6.3 billion stolen, raising concerns about fund recovery and crypto market impacts; about $3 billion of the stolen assets have been frozen so far.
- Binance has replenished 90% of the stolen assets and pledged to cover the remaining 10% using its Secure Asset Fund for Users (SAFU) and company funds, but experts caution that such pledges are not guarantees until payouts occur.
- Unlike traditional bank deposits insured by the FDIC, cryptocurrency transactions are irreversible and lack a government-backed insurance equivalent, leaving investors vulnerable if exchanges are compromised or individual accounts are hacked.
- Storing crypto offline can reduce risks from exchange hacks but introduces other vulnerabilities, such as lost devices or compromised backups, highlighting that all custody methods carry inherent risks.
- Investors should carefully evaluate crypto platforms by understanding coverage details, exclusions, total coverage amounts, and enforceable rights to repayment, as "insured" status does not guarantee protection of funds.
