GM. This is Milk Road, the crypto newsletter that’s like a fast pass at Disneyland. Skip the line, get straight to the good stuff.
Here’s what we’ve got for you today:
- ✍️ Binance reopened. Where’d the money go?
- 🎙️ The Milk Road Show: 4 Wall Street Insiders Reveal What's Coming for Crypto in 2027.
- 🍪 Tether holds ~150K BTC.
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BINANCE REOPENED. WHERE DID THE MONEY GO? 🚪
Last Thursday, hackers drained ~$6.3B from Binance's hot wallets (aka: the internet-connected wallets exchanges use to pay out withdrawals).
It's the largest crypto hack on record, and Binance froze withdrawals while it worked out what happened.
… which left everyone asking the same thing: could customers actually get their money back out?
Six days later, we've got an answer, and it's a pretty good one.
Here's how the recovery has gone so far:
- Friday: Binance said it had $6.34B ready to cover the losses, pulled from its emergency user fund (SAFU), its insurance fund and its own money.
- Saturday: the FBI pinned the hack on TraderTraitor, a North Korean hacking group, and Binance said it had replaced 90% of the stolen assets.
- Sunday: withdrawals reopened on 15 networks, including BTC and ETH.
- Monday: Binance had replaced 95% and published a proof of reserves (a cryptographic check that lets customers confirm their balances are fully backed) showing 10 major tokens backed at least 1:1.
- Tuesday: co-CEO Richard Teng said 98% had been replaced, and Binance published its first findings on the attack.
Then came the real test…
In the first 46 hours after reopening, customers pulled $10.97B out and put $5.69B back in:
That's $5.28B in net outflows, or ~3.1% of the $171B Binance held before the hack.
Most of that left on Sunday, and by early Tuesday, more money was coming into Binance each hour than going out.
For an exchange that just lost $6.3B, that's a manageable leak, and it slowed fast.
Billions still walked out the door in a weekend though…
And most of it didn't end up where you'd expect.
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BINANCE REOPENED. WHERE DID THE MONEY GO? (P2) 🚪
So where’d that $5.28B go when it left Binance?
The first guess is a rival exchange…
Kyle (our Head of Research) added to his COIN position last Friday on exactly that idea, calling Coinbase "the most trusted exchange in the world."
But the first weekend of data doesn't back that up just yet.
Over the 24 hours after reopening, DefiLlama tracked $4.05B in net outflows from Binance. The next 10 biggest exchanges it tracks took in just $368M combined (and $317M of that went to OKX).
DefiLlama doesn't track Coinbase or Kraken, but their bitcoin balances on CoinGlass tell the same story:
I.e. Only a small slice of what left Binance showed up at its big rivals.
The rest is harder to pin down. Binance is paying withdrawals out of brand-new wallets that trackers haven't labeled yet, so some of that "outflow" is Binance moving its own money around.
Beyond that, onchain data can't tell smaller exchanges apart from wallets people control themselves.
Either way…
Binance passed the test it had to pass this week. It paid people out, and the proof of reserves backs that up.
There's still work left to do though.
Binance takes another reserve snapshot today covering more tokens, and it still has to buy back the last 2% (mostly smaller, harder-to-buy tokens).
Monday's proof also used an Oct 31 snapshot, taken before the withdrawal rush, so today's is the one that will show where Binance stands as of right now.
BITE-SIZED COOKIES FOR THE ROAD 🍪
Every $BTC to $ETH swap is a taxable event. But inside a crypto IRA, it generally isn't. Here's how Roth and Traditional crypto IRAs work (and the catches).*
Stock perps get the green light: CFTC Chair Mike Selig says perps on single U.S. stocks can start trading on CFTC-registered exchanges today, a first.
Tether holds ~150K BTC: CEO Paolo Ardoino says that's more than any public company but Strategy, though its Sep 30 attestation counted 100,060 BTC.
Bitcoin's midterm record: BTC has been higher a year after every midterm Election Day since 2010, 4 for 4, though that's a tiny sample.
*this is sponsored content.
