Binance's user-protection reserve has lost half its bitcoin, and the exchange has not said when the coins will come back. The wallet Binance designates as its Secure Asset Fund for Users (SAFU) held slightly more than 7,500 bitcoin as of Tuesday, down from 15,000 in February, when the exchange completed the conversion of the roughly $1 billion fund from stablecoins into bitcoin. Four transactions on Oct. 31 accounted for the reduction, according to blockchain data from mempool.space cited by CoinDesk. At about $77,000 per coin, the remaining holdings are worth roughly $580 million.
The drawdown follows Binance's disclosure that it would use part of the fund, together with its corporate treasury and a slice of its futures insurance fund, to absorb losses from a breach it has valued at $6.34 billion. The exchange has said users will not bear the cost and that it will refill SAFU to about $1 billion, but it has not given a date for doing so and has not disclosed how much of the futures insurance pool was tapped.
A rebalancing rule published in Binance's SAFU FAQ does not address the situation. The policy commits the exchange to top the fund back up to $1 billion if its value drops below $800 million because of bitcoin price swings. It says nothing about replenishment after the reserve is spent.
Note: Values use a bitcoin price of about $77,000. The February figure reflects the fund after its conversion from stablecoins.
The spending is one strand of a broader recovery effort that Binance has been rolling out in stages. In its fourth incident update, published Nov. 1, the exchange said it had restored access across 15 networks in a first withdrawal phase running from 06:00 to 09:00 UTC, covering Bitcoin, Ethereum, BNB Chain, Solana, Tron, Polygon, Arbitrum, Base, Optimism, Avalanche, TON, XRP, Zcash, Dogecoin and Sui, along with the major stablecoins issued on those chains. Deposits had stayed open throughout. Binance said the sequence reflected which networks drew the heaviest withdrawal demand in the preceding week.
The same update put compensation coverage at about 95% of the affected amount, up from roughly 90% in the prior notice and about 80% before that. Binance attributed the remaining gap to tokens outside the top ten by liquidity, which it said take longer to source at the required scale, adding that it is buying them with industry partners. It repeated that customer balances are intact and that the company, not its users, will carry the loss.
Separately, Binance said it had finished a zero-knowledge proof for a reserves snapshot taken Oct. 31 at 00:00 UTC. The verification covers ten tokens -- BTC, ETH, USDT, BNB, SOL, USDC, XRP, USD1, RLUSD and ZEC -- and the exchange says holders of those assets can confirm at least one-to-one backing through a verifier tool on its Proof of Reserves site. A wider snapshot is planned for Nov. 4, with the accompanying proof expected to take about 40 to 50 hours to generate. Further withdrawal phases were slated to begin Nov. 3.
Binance has said law enforcement and industry partners helped freeze roughly $3 billion on-chain, a figure that reflects assets secured rather than cash returned to the exchange. Replacement purchases are tracked separately from those recovery efforts.
The SAFU drawdown matters for how traders read the exchange's balance sheet. The fund was designed as a backstop for customer losses, and its conversion into bitcoin earlier this year tied its dollar value directly to the price of the largest cryptocurrency. Spending the coins rather than the stablecoins they replaced means the reserve's purchasing power now moves with a market that has already fallen well below the levels seen when the fund was assembled. Until Binance sets out a schedule for rebuilding the reserve, the exchange is operating with roughly half the bitcoin cushion it advertised at the start of the year, even as it works through the last 5% of the hack's cost.