Grayscale: Binance Incident Will Push Exchanges to Strengthen Security and Highlight the Importance of Institutional Custody

Nov. 4 — Grayscale research head Zach Pandl analyzes that the October Binance breach of more than $6 billion in assets has pushed crypto security losses in 2026 to a new high of over $8 billion; excluding this incident, 2026 losses would be on par with last year. More importantly, crypto security losses as a share of total market capitalization have long been trending downward.

Pandl said Binance has quickly restored customer positions; 95% of affected assets are now fully replenished, while the remaining 5% — less liquid tokens — will require more time, and Binance customers will not bear losses. About $2.9 billion (roughly 45%) of the stolen funds has already been frozen by stablecoin issuers such as Tether and Circle, and these funds are expected to be returned to Binance. Pandl believes the incident may temporarily dent market confidence, but will ultimately prompt all exchanges to strengthen security practices and highlight the importance of institutional custody. A growing number of US investors are gaining digital asset exposure through crypto ETPs, which typically feature segregated holdings, offline storage, multisig wallets, strict internal processes and insurance policies.