Binance boosts market maker rebates after $6.3B hack

Binance has raised the rebates it pays some market makers in its spot and futures markets. The world's largest crypto exchange is trying to keep trading active after a record $6.3 billion hack, according to Bloomberg. People familiar with the matter told Bloomberg that the company contacted smaller trading firms soon after last week's breach. The offer shows that Binance is now competing to hold on to liquidity, after spending days covering stolen funds and reopening withdrawals.news.bloomberglaw.com

A one-week rebate upgrade

Binance ranks market makers in tiers, largely by how much liquidity they provide. Firms in higher tiers get larger rebates, which lower their trading costs, Bloomberg reported. Under a one-week promotion, Tier 2 and Tier 3 market makers will receive the same rebate rates as Tier 4, the platform's top group. The aim is to give smaller liquidity providers a financial reason to quote prices and keep deeper order books on the exchange, according to Bloomberg Línea.bloomberglinea.com+1

A Binance spokesperson said the company's updates after the breach helped calm the market. "Just as we prioritize clear communication, we took immediate steps to maintain our core strength: our liquidity," the spokesperson said, as quoted by Bloomberg Línea.bloomberglinea.com

The pressure is easy to measure. Data from Talos showed that Bitcoin ↗ 4.15% order-book depth on Binance, measured within 1% of the price, fell about 30% in the 24 hours after the attack, from $45 million to $32 million. Net withdrawals reached $4.7 billion on Monday, November 2. That is a large sum, but still a small share of the assets Binance holds.bloomberglinea.com

Crypto's largest heist

The theft started at about 4:05 p.m. Eastern time on Thursday, October 29. Most of the funds were drained in roughly 20 minutes, NPR reported. The FBI attributed the attack to TraderTraitor, a North Korean state-sponsored group. The bureau said the hackers were converting the stolen assets mainly into Ethereum ↗ 6.90%, and it published 628 addresses linked to the theft, BleepingComputer reported. Binance co-CEO Richard Teng said the attack began with a compromised laptop and used malicious software built to delete evidence of its activity, according to Reuters.bnd.com+2

Tether froze nearly $1.57 billion linked to the incident, and Circle ↗ 1.20% froze more than $800 million.bnd.com

Covering the losses

Binance said it has covered 95% of the stolen assets. It drew on its Secure Asset Fund for Users, its Futures Insurance Fund and its corporate treasury to do so, TechCrunch and Yahoo Finance reported. Withdrawals resumed in phases on Sunday, November 1. Customers pulled a net $3.64 billion, or 2.1% of the exchange's assets, in the first hours, Reuters reported.techcrunch.com+2

"Binance will bear the financial impact of the stolen funds. These losses will not be passed on to users," the company said.techcrunch.com