Quick summary: Crypto exchange hacks can be hard to contain because transfers cannot be reversed once they are completed on a blockchain. Some bank payments can be stopped before completion. Investigators may trace stolen crypto, while exchanges or token issuers may restrict its movement. Recovering stolen assets and repaying customers are separate processes.
Attackers can compromise a crypto exchange’s withdrawal system to move crypto beyond the platform’s control. Once a blockchain transfer becomes final, the exchange cannot cancel it. Some bank payments can be stopped while they are still being processed.
Binance’s $6.3 billion theft from its hot wallets on October 29, 2026, illustrates that distinction.
This was a complex attack. The attacker also used a self-destruct mechanism that destroyed tooling and traces as they went, making it more difficult for us to trace and investigate, said Binance co-CEO Richard Teng.
TRM Labs said the attack pointed to a compromise of Binance’s systems for authorizing wallet transfers.
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How an exchange breach becomes a crypto theft
When crypto users hold their crypto on a centralized exchange, the platform controls the wallets holding it. Private keys are secret codes that are used to authorize blockchain transfers. Software and approval systems are also used by exchanges to control withdrawals.
Attackers can exploit these systems without breaking the blockchain itself.
A stolen private key can give an attacker control of a wallet. An unlimited token approval can let a malicious contract take all of the tokens covered by that approval. Always check what a transaction allows before signing it.
An exchange can pause withdrawals. The pause alone might not stop an attacker who still controls a compromised wallet. The exchange should also address the access or permission used in the attack. It cannot, by itself, reverse transactions that are already finalized on an external blockchain.
Important read: Binance reports $6.3 billion hack as Tether and Circle freeze funds
How can banks interrupt fraudulent transfers?
SWIFT’s Stop and Recall service helps participating banks stop payments that are still being processed and request the return of funds. But recovery is not guaranteed.
However, some bank transfers are final.
According to the Federal Reserve, Fedwire payments are final and irrevocable once made. Recovery chances depend on the payment system and when the fraud is detected.
Can stolen crypto be frozen or recovered?
Some token issuers can freeze their own tokens using specific addresses. This can stop those tokens from moving further, but it does not apply to every cryptocurrency.
Public blockchains can help investigators follow transfers between wallet addresses. Following the money does not, by itself, identify who controls an address or allow investigators to recover the funds.
Circle froze about $825 million USDC linked to the Binance attack, TRM Labs reported. It also confirmed that Ripple froze 40.5 million RLUSD, Ripple’s dollar stablecoin.
Binance co-founder Yi He separately said that Ripple froze approximately $200 million.
What you should do after a crypto exchange hack
After a crypto theft, you can take several steps to gather evidence and secure any remaining assets.
- Pause new deposits: Avoid making new deposits on the affected exchange and check its official website or app for updates.
- Contact official support: Report unauthorized activity immediately. If your own account was accessed, use the account-lock option where available and keep your support case number.
- Secure your account: Use a trusted device to change your exchange and email passwords, review two-factor authentication (2FA), and remove unfamiliar devices or connected trading tools.
- Save the evidence: Record affected balances, amounts, dates, wallet addresses, and transaction IDs. Keep screenshots and support messages.
- Report the theft: Contact the appropriate cybercrime authority. Be wary of recovery services that demand upfront payments or promise guaranteed recovery.
Important read: How to Recover Lost Crypto?
Are crypto exchanges hacked more often than banks?
The figures cited here do not establish whether crypto exchanges are hacked more often than banks. A reliable comparison would need consistent definitions and reporting for both groups.
A 2024 International Monetary Fund (IMF) report found that nearly one-fifth of reported cyber incidents during 2004-2023 affected financial firms. Banks were the most frequent targets within the financial sector. Financial firms reported almost $12 billion in direct losses over that period.
Those figures only capture reported cyber losses, not every dollar lost to banking fraud, and cannot prove whether banks or crypto exchanges suffer more frequent hacks.
For customers, the key questions are who controls their assets, who approves withdrawals, what can stop unauthorized transfers, and how losses would be recovered.
Final thoughts
Before you select a crypto exchange, check how it protects your funds, approves withdrawals, and handles losses after a theft. Read what any insurance covers and excludes, and whether the platform promises to repay affected customers. For assets you do not need for trading, consider a hardware wallet to keep them offline.
FAQs
Can an exchange reverse a stolen crypto transfer?
Generally, no. An exchange cannot cancel a blockchain transfer that is finalized. It can pause its own withdrawals, while certain token issuers can freeze their tokens. These actions do not automatically return stolen funds.
Can stolen cryptocurrency be recovered?
Sometimes. Investigators can trace transfers, and exchanges or token issuers may be able to freeze assets within their control. Returning those assets can require cooperation and legal action, as tracing funds alone does not guarantee recovery.
Will an exchange refund customers after a hack?
Repayment is not guaranteed. It depends on the exchange’s obligations, available funds, and any applicable insurance. An exchange might use company funds to cover losses before stolen assets are recovered.
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