Binance stated that it will cover the $6 billion in hacker losses with its own funds, which will not affect customers' balances.

Binance stated that this week's hacker attack did not affect customer balances, as the stolen crypto assets came from one of its own hot wallets, which are legally owned by the exchange.

According to reports, a spokesperson from Binance explained this arrangement to a reporter Eleanor Terrett. The spokesperson stated that when users deposit crypto assets with the exchange, the platform typically assumes ownership of those assets and records a corresponding claim against each customer.

The report indicates that the assets held by retail investors are usually deposited in a shared account, and each customer has the right to claim their proportion of those assets accordingly.

The assets held in the wallet that was emptied were originally intended to support these claims, therefore the related losses will first be borne by Binance.

Binance stated that it has reserved over $6.34 billion of its own funds to replace the assets that were stolen this time.

The report also stated that if the reserves are insufficient, customers could face a reduction in compensation, which is commonly referred to as “haircut (write-down)”.

Author: Anjali Belgaumkar; Source: Coinpedia