Post-Binance hack: Industry experts weigh in on crypto’s safest haven

The remnants of the Binance hack, which has now been acknowledged as the biggest hack in history in terms of hacked value, reaching almost $6 billion, have raised several questions. The most obvious of which is how we can safeguard crypto holdings, and where investors and retail buyers can purchase, hold, and sell crypto. Whether it’s buying through P2P networks while holding crypto or digital assets on self-custodial wallets, or through crypto exchanges, banks, or even through institutionally offered Bitcoin ETFs or ETPs, investors, institutional or retail, are asking where it is safe.

Financial analysts and blockchain researchers are actively contrasting the security profiles of Centralized Exchanges (CEXs), Crypto ETFs, and Decentralized Finance (DeFi) and other avenues. Cantor analyst Ramsey El-Assal said there may even be a silver lining in how quickly the industry responded. “While spectacular crypto hacks have become all too common, we believe the ecosystem is steadily adapting.

” He expects crypto stocks to recover. “We would be buyers on weakness,” he said. TD Cowen’s Lance Vitanza made a similar case, arguing that the hack exposed weaknesses in Binance’s security rather than in the technology behind bitcoin or other cryptocurrencies.

“We do not stop using dollars when a bank is robbed, just as car theft does not invalidate the automobile,” Vitanza wrote. “We believe Binance has more than enough liquidity to cover the hole,” they wrote. Where will crypto investors go?

While some believe decentralized exchanges will benefit, or that other centralized crypto exchanges will rival Binance, others think investors will turn to digital asset ETFs and ETPs given their safe-haven status. Andrew Forson, President of DeFi Technologies, told Cryptopolitan, “I believe investing in digital asset ETPs or ETFs is much safer; first, you have someone to call if something goes wrong or if assets are lost, as well as the backing of the company’s balance sheet. ” He adds, “Buying the direct token or digital asset puts buyers at a significant counterparty risk with the crypto exchange.

This is an unpleasant reality. Financial institutions and asset managers have the insurance and legal firepower to fight back, while individuals do not. ” Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, described exchange-traded funds (ETFs) as the new crypto exchanges.

In an X post, he stated, “Yes, this is why ETFs are the new crypto exchanges. You get (much) lower trading fees and added (adult) protection. Cheaper and safer.

” Although centralized crypto exchanges have beefed up their security and what they call SAFU funds to absorb these losses pertaining from hacks, the protection is entirely corporate-dependent, because if an exchange does not have adequate reserves or insurance, a hack can result in bankruptcy. Analysts from Standard Chartered foresee that the Binance hack could significantly expedite the mass migration to DEXs, where trades are executed directly between users without the need for intermediaries. Platforms such as Uniswap, renowned for their strong security track record, are becoming increasingly appealing for users who are cautious of centralized systems.

In the wake of the hack, blockchain data showed the attacker immediately hunting for “exit ramps” by routing funds through decentralized protocols like Uniswap and Aave to swap stablecoins for Ethereum. Yet, on DEFI as well, there are no corporate or institutional safety nets. If a smart contract has a code vulnerability, or if you sign a malicious transaction (similar to the EIP-7702 delegation signature used in this exploit), your funds can be permanently drained with zero recourse.

Are regulated crypto exchanges safer than unregulated? In Abu Dhabi, considered today as the global center for Binance, given that all its regulated activities and its three segregated licenses in ADGM are part of its international offering, the regulatory authority of ADGM, the FSRA (Financial Services Regulatory Authority), came out with a short but clear commentary, noting that it was engaging closely with Binance and would protect the interests of clients. ” “The FSRA is aware of the matter relating to Binance exchange on 30 October 2026, concerning a security incident involving unauthorized withdrawals of assets.

The FSRA is engaging closely with Binance and monitoring the incident. Protecting the interests of clients and supporting the integrity and orderly functioning of markets remain the FSRA’s key priorities. ” Soham Jethani, Partner at Septten Advisors based out of the UAE, who has supported VASP and fintech licensing across GCC, Asia, and Europe, noted, “A centralized exchange is not inherently safer because it is regulated.

Centralization concentrates control over customers’ assets, and a failure in the people or systems exercising that control can affect a very large number of customers at once. That concentration is precisely why effective regulation matters so much. ” He asserted that regulation is of paramount importance for centralized exchanges, because customers are entrusting someone else with their assets.

He states, “A credible framework needs enforceable segregation of client assets, independent controls over withdrawals, adequate financial resources and meaningful accountability when those safeguards fail. Insurance is expected to be part of that protection. ” He references FTX and WazirX, which illustrate the consequences when customers lose access to their assets and recovery becomes dependent on lengthy court-led processes.

While their causes were different: FTX involved fraud and misuse of customer funds, while WazirX suffered a major wallet hack. Recoveries have occurred in both cases; eventually, he notes that repayment against a valid claim is not necessarily the same as getting your original crypto holdings back when you need them. He added that, on the other hand, self-custody removes dependence on the crypto exchange but puts responsibility for keys and transactions solely on the user.

In short, Human error doesn’t disappear. ” Are Banks the safer bet for crypto? With more and more banks entering the digital asset and tokenized deposit space, they could become the go-to place for holding and dealing with crypto.

Stefan Deiss, CEO of The Hashgraph Group, which has built identity solutions on the Hedera DLT platform, states, “The attack on Binance didn’t rely on anything state of the art nor was it AI in nature. ” He told Cryptopolitan “The attackers compromised one engineer’s laptop and used his trusted access as their own. That is an identity problem: once a system believes you are someone it trusts, it lets you act.

” He explains, “Banks learned to solve this the hard way. In 2016, North Korean hackers used stolen credentials to try to move nearly $1 billion out of Bangladesh’s central bank. Banks responded with tighter controls so that no single login can move large sums without independent checks.

Crypto has grown so quickly that its security has focused on protecting the blockchain itself, while controls around the people and systems inside the business have been slower to catch up. ” He believes that crypto exchanges need to get identity right, especially as AI agents arrive. “Companies are now letting agents pay suppliers, move funds and approve transactions, and one hidden instruction in an email can trick an agent into working for an attacker.

A nation-state can try that at scale. Every agent needs a verified identity, a human accountable for it, firm spending limits and an off switch. ” In the final analysis, Binance has resumed phased withdrawals today, the first of November, and it has noted in its blog to its customers that teams have taken precautionary measures to safeguard the platform, conducted security assessments, and worked to verify the readiness of affected services.

The crypto exchange reiterated that user funds remain safe, and that Binance will absorb the financial impact of the stolen funds. Binance notes that it has been purchasing the remaining affected assets through market and OTC channels. Binance has now covered approximately 95% of the impacted amount.

The question remains: if it wasn’t Binance, with such a huge pool of SAFU and capital, could it have been able to weather the storm? Don’t just read crypto news. Understand it.

Subscribe to our newsletter. It's free.