Key Notes
- CZ said Binance’s reported $3.6 billion outflow was much smaller than he had expected.
- He credited stablecoin issuers and law enforcement with helping freeze stolen assets.
- He called for stronger AI defenses and said companies were discussing a security alliance.
Changpeng “CZ” Zhao expected a much larger rush of withdrawals after Binance’s $6.3 billion hack. In a November 3 CoinDesk interview, the exchange’s founder said he had contemplated outflows of 10%, 20% or 30% of holdings. The roughly $3.6 billion discussed by the interviewer amounted to about 2%, he said.
For Zhao, the gap reflected users’ confidence that Binance would absorb the financial loss. But his account of the response also carried a warning for banks and crypto platforms alike. He expects more attacks as AI strengthens hackers’ capabilities, and wants defenders to adopt the same technology faster.
Why the Outflows Surprised Him
Zhao credited Binance’s record, its communication during the incident and its commitment to protect users for limiting withdrawals. He also pointed to an hourly period in which deposits had begun exceeding withdrawals, calling it an encouraging sign of trust.
Those were snapshots discussed during the interview. Hourly inflows can turn positive while withdrawals still exceed deposits over a longer period. CoinScreamer’s subsequent reporting on Binance’s daily flows tracked the balance over a separate rolling 24-hour window.
Zhao said he learned of the attack around midnight in the United Arab Emirates, through messages from Binance and reports on X. Having stepped down as CEO, he focused on communicating with the community while the company worked to contain the breach.
How Issuers and Investigators Helped Freeze Funds
Zhao thanked Tether, Circle, cybersecurity firms, other exchanges and law enforcement agencies for moving quickly. He said the stablecoin issuers had frozen substantial amounts by the time he was learning the scale of the incident.
He later learned that the US Secret Service was helping with that process, he said, while acknowledging that he did not know who approached whom or how the coordination worked.
A freeze restricts the movement of tokens at an address. Recovering frozen assets and returning them involves further tracing and legal steps. Zhao’s interview praised the speed of the response without supplying a new total returned to Binance.
Why He Thinks the Risk Reaches Banks
Zhao argued that banks could be in a worse position to withstand the growing attack capabilities available to hackers. That was his assessment of the threat, based on his view that large crypto platforms face attacks earlier because they hold readily transferable digital assets.
He also suggested the Binance breach may have added to concerns about security across financial markets. Technology stocks were already falling for other reasons, he said. He thought the hack could have reinforced questions about whether major systems were secure, without assigning a measurable share of the stock-market decline to it.
AI Defenses and an Industry Alliance
Zhao said the frequency of major incidents appeared to be accelerating, contrasting attacks he once saw roughly every six months with several platforms suffering incidents in a single day. His comparison described the pattern he was observing.
His response was direct. Crypto and financial companies should use AI more heavily to find and fix weaknesses. He said attackers need only one opening, while defenders must identify and close many, and argued that access to the most capable defensive tools remained uneven.
He also said companies were discussing an alliance and shared standards to help one another, though details were limited. The idea echoes his Talking Tokens interview, where he discussed shared audits and faster coordination on freezes.
Zhao expects a difficult adjustment in the near term, followed by stronger systems as defensive AI improves. That longer-term optimism rests on companies investing in protection and learning from the weaknesses that attacks expose.
Key Moments in the Interview
- 04:29 — Expected withdrawals
- 07:06 — Freezing stolen funds
- 09:54 — Banking security risks
- 12:33 — AI defenses
- 14:23 — Industry alliance
- 14:50 — Long-term outlook
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