Written by: ChandlerZ, Foresight News
At the eight-year mark of Binance's establishment, if one keyword were to define its growth trajectory, security might be more persuasive than trading volume. Eight years ago, it was a rising star in the crypto world; eight years later, it has become the largest cryptocurrency trading platform globally, serving over 250 million users. But what truly supports this giant in maintaining its footing is not the fluctuating market or the influx of traffic, but a continuously evolving security system.
The development history of the cryptocurrency industry is, to some extent, a game of 'who can hold the keys.' From the theft of 850,000 bitcoins from Mt.Gox to Bybit facing a $1.4 billion hacker attack in 2025, each security incident questions the bottom line of the entire industry. Over the past decade, the market value of the cryptocurrency industry has expanded from an initial ten billion dollars to a peak of 3.7 trillion dollars; this market increasingly resembles an open treasury, attracting not only developers and users but also hackers and scam groups with constantly advancing technology.
According to a report by on-chain security company Cyvers, losses in the cryptocurrency industry due to hacker attacks reached $2.3 billion in 2024, a 40% increase from 2023. According to the Hack3d report released by CertiK, the cryptocurrency industry lost over $2.47 billion due to hacker attacks and scams in the first half of 2025, exceeding the total amount for the entire year of 2024. Among them, the combined losses from Bybit vulnerabilities and the Cetus protocol vulnerability reached $1.78 billion. Wallet leak incidents accounted for the main cause, resulting in a loss of $1.7 billion, while phishing attacks led to a total loss of $410 million from 132 incidents. Ethereum was the most attacked chain, involved in 164 incidents with losses amounting to $1.5 billion. The total loss in the second quarter was $801 million, a 52% decrease from the previous quarter.
Historically, numerous large-scale theft incidents and exposure of exchange security vulnerabilities have revealed that when security measures are insufficient, user funds and market confidence can be severely impacted. As the largest cryptocurrency exchange by trading volume globally, Binance has always been at the forefront of industry security. As of 2024, Binance has custody of user assets exceeding $160 billion, with a cumulative historical trading volume reaching $100 trillion, serving over 250 million registered users globally. The construction of its security system is not only crucial for the platform's own development but also sets a benchmark for security standards across the entire industry.
Exchange security has evolved from single-point defense to a three-dimensional protection network. Only by establishing a rigorous security system, whether in asset reserves, cold and hot wallet separation, multi-signature technology, or in real-time monitoring, anti-fraud, and risk warning processes, can a truly trustworthy trading environment be provided for users.
With the industry's development, security issues are no longer confined to single technologies or management levels; their significance has expanded to system construction, data transparency, and risk warnings. Each security link plays a key role in the long-term development of the platform, becoming an inevitable choice to drive the industry towards maturity.
The answer sheet for reserve fund transparency and stress testing.
Transparency is the best disinfectant. Binance's reserve proof system is a concrete practice of this philosophy, a tangible proof of its commitment to the security and transparency of user funds. This reserve proof can verify wallet ownership, user balance snapshots, and zk-SNARK cryptographic proofs to conduct on-chain verification transactions, proving ownership of the wallet holding user funds, and confirming that the total user balance is included in the report without disclosing individual user's detailed information through zk-SNARKs technology.
Binance regularly publishes proof of reserves, allowing users to independently verify whether their assets are included in the total reserves. Unlike annual audits of traditional financial institutions, Binance's PoR system achieves near real-time reserve verification. Over the past period, even during market fluctuations and peak withdrawals, Binance has consistently proven the reliability of its PoR system, maintaining a 1:1 ratio of user asset holdings and efficiently processing massive withdrawal requests.
During the SEC lawsuit against Binance in 2023, a non-voluntary stress test precisely validated the actual solvency of Binance's asset reserve mechanism. At that time, market panic led to a concentrated withdrawal of users, causing Binance's total assets to drop sharply from $64.195 billion recorded in June 2023 to $55.95 billion.
https://www.binance.com/en/square/post/19542070539505
In this nearly 'bank run'-like severe test, Binance's asset reserve system continues to operate stably, efficiently handling massive withdrawal requests and fully honoring user trust in its reserve proof.
Looking back, the short-term fluctuations triggered by the SEC lawsuit at that time were just a small episode in Binance's development history; it not only validated the effectiveness of the PoR system but also further confirmed Binance's solid protection of user assets in extreme market conditions. It showcased Binance's resilience that has continuously expanded in the subsequent journey, and its current scale and influence far exceed those of the past, steadily moving towards globalization and diversification.
In addition to the 1:1 reserve mechanism, Binance established the Secure Asset Fund for Users (SAFU) in July 2018 as an additional safety barrier, maintaining a scale of $1 billion year-round, specifically for safeguarding user assets in extreme situations. The establishment of the SAFU fund reflects Binance's foresight in bottom-line thinking; even in the worst-case scenario, user assets still have a final line of defense.
The sources of the SAFU fund come from a certain percentage of trading fees, managed through a multi-signature wallet, with funds allocated to high liquidity assets such as Bitcoin, Ethereum, and BUSD to ensure stability in value even during severe market fluctuations. This fund management model ensures both fund security and the ability to quickly mobilize resources in emergencies.
From anti-fraud to hacker attacks, the AI sniper battle.
The AI-driven security matrix is the invisible guardian built by Binance.
In the cryptocurrency world, dangers often lurk in seemingly normal transactions. To address this challenge, Binance has built an eight-level anti-fraud risk control system centered around AI, covering every aspect from custom pop-up notifications, one to twenty-four hour cooling periods, to chat interventions, followed by call alerts, fully encompassing prevention before and intervention after.
In 2024, Binance made tremendous efforts, tools, technologies, and resources to combat fraud and restore funds for victims, recovering $9.1 million of stolen funds and successfully preventing potential losses of over $129 million, sending an average of more than 15,000 risk warnings to users daily. Behind these numbers are countless real stories of users avoiding property loss. Each successful interception is a validation of its security philosophy.
As the technological defenses continue to evolve, this has also turned into a cat-and-mouse game with attackers. In 2024, Binance developed over 50 machine learning models specifically for identifying scam activities on the platform, especially targeting complex fraud patterns in C2C trading environments. These models have undergone 14 major upgrades, continually adapting to the evolution of scam methods, evolving from initial rule-based judgments to deep learning systems capable of recognizing subtle behavioral patterns.
It's like an endless arms race, where attackers constantly change their methods, and Binance must always stay one step ahead.
Specifically, Binance's AI security system can achieve:
Data aggregation and analysis. Binance's system analyzes large amounts of real-time data to identify anomalies that may indicate fraud.
Behavior analysis. AI-driven behavior analysis helps distinguish legitimate user activities from potential scams.
Predictive analysis. Predictive models forecast potential scam attempts before fraudulent transactions are completed.
Real-time monitoring. Machine learning algorithms run in real-time, allowing the team to intervene within milliseconds.
In addition, Binance's security team has established close cooperation mechanisms with global law enforcement agencies, responding to nearly 65,000 law enforcement requests in 2024 alone and training over 1,300 investigators from 80 countries to enhance global collaboration in cryptocurrency security.
At the same time, recognizing that users are the first line of defense in security, Binance has invested significant resources in user security education. The Binance Risk Sniper channel regularly publishes warnings about the latest scams, while enhanced risk management tools filter and remove high-risk posts on Binance Square, providing all users with a safer ecological environment.
Compliance restructuring, from passive response to proactive defense.
Compliance is not a shackle to development; rather, it is a key moat for cryptocurrency exchanges to move into the mainstream and gain user trust. In recent years, some have viewed regulation as a barrier to innovation. Now, in the policies and industry environments of more and more countries, healthy and clear regulation is seen as the foundation for the industry to truly move towards scale and sustainable development.
In this context, Binance chose to accelerate its global compliance process, re-evaluating and optimizing its internal governance structure to build a compliance system compatible with the regulations of various countries and international standards.
In response to the diverse and dynamic regulatory requirements globally, Binance's investment in compliance has been continuously upgraded. Currently, the platform invests hundreds of millions of dollars annually to strengthen compliance capabilities, and the size of its professional team has expanded to 650 people, covering key areas such as anti-money laundering, customer due diligence, market monitoring, and tax compliance. Rather than seeing these investments as costs, they should be viewed as strategic investments in the future.
This philosophy is concretely reflected in Binance's extensive licensing matrix. As of March 2025, Binance has successfully obtained licenses or registrations in 21 jurisdictions worldwide. Whether in the United States, Europe, Japan, El Salvador, Argentina, or Brazil, Binance continues to deepen its cooperation with local regulatory authorities and improve its compliance framework.
Compared to the scrutiny pressure faced in the early years in the US market due to insufficient compliance, Binance has gradually adapted to the challenges of 'higher standards' by actively bringing in local commercial banks and financial institutions as partners, deeply integrating into the local financial ecosystem. For a global platform, compliance licenses are not just passes; they are also important credibility assets that allow for business synergy and risk isolation across different markets.
It is worth mentioning that in addition to expanding its internal compliance team, Binance has also invested significant resources in compliance technology and external partnerships. By collaborating with top regulatory technology companies, Binance has developed and deployed various dedicated tools for real-time transaction monitoring, identifying potential risks, and improving compliance processes. These technologies provide early warnings for suspicious behaviors and assist local law enforcement agencies in tracking cross-border illegal fund flows.
Reflecting on the past few years, Binance has faced multiple challenges but continues to move forward on the path of compliance. From the early compliance explorations of its U.S. subsidiary Binance.US to a series of successful registrations and launches in countries like Japan and El Salvador, it has demonstrated a balance achieved between compliance and compliance innovation. In today's rapidly changing policy and industry landscape, this forward-looking compliance layout undoubtedly serves as an important support for Binance's broader internationalization strategy and provides a replicable model for the cryptocurrency asset industry in the global trend towards compliance.
The endpoint of security is to build a comprehensive protection system.
Years of security practice at Binance have proven that the security of an exchange cannot be solved by a single technology or strategy; it requires a comprehensive protection system built from multiple dimensions such as technical implementation, operational management, and user education. Just like the human immune system, it requires physical barriers like skin, active defenses like antibodies, and healthy lifestyle habits as a fundamental guarantee.
The core of exchange security is to ensure the integrity and availability of user assets while finding a balance between decentralization and compliance requirements, establishing a transparent risk management system, timely responding to technical vulnerabilities, hacker attacks, and market pressures, and ensuring the stable operation of the system and user trust. For Binance, continuing to strengthen security advantages and improve the compliance system will be key to remaining undefeated in a fiercely competitive and highly regulated environment.
Looking ahead, as cryptocurrency assets increasingly integrate into the global financial system, institutionalization, specialization, and compliance are the industry trends. Leading exchanges will continue to invest more resources in security and compliance, which will drive the entire cryptocurrency ecosystem towards maturity and stability in the long run. In this process, Binance's actions and performance undoubtedly hold a significant guiding role.
However, it is clear that security has never been just a temporary goal but an endless marathon. In this prolonged confrontation, Binance has walked a path of eight years. Over this time, Binance's system has continuously expanded while still being able to securely protect assets and maintain trust.
The places most closely monitored by hackers are also the places most rigorously fortified.