Binance May Have Lost Around Half of 5-Year Profits to Fines and Hacks: Analysis

Key Takeaways

Following the largest crypto theft in history, Binance’s combined bill for fines and hack-related losses has reached around $10.7 billion. Meanwhile, Vetle Lunde, head of research at K33 Research, the research arm of Norwegian digital asset brokerage K33, estimates that “a back-of-the-envelope calculation puts Binance’s pre-tax profits at $19.2 billion” for 2021–2025.

Binance May Have Lost Around Half of 5-Year Profits to Fines and Hacks: Analysis — Estimated pre-tax profits of Binance. Source: K33 Research

“Funds are, in all likelihood, very SAFU, and being the leading casino is unimaginably profitable,” Lunde posted on X, noting that “it is quite wild that this, to some extent, reflects a cost of doing business for Binance.”

Meanwhile, losses from the record-high hack could still decrease. Around $3 billion in stolen crypto assets have been frozen, while the hunt for the remaining funds continues. It is not yet clear how much Binance might recover or when it might do so.

Additionally, Binance used half of its SAFU fund, an emergency fund for user losses, or 7,500 BTC, to cover around 9% of the losses.

More Than $4.3 Billion in Fines and $6.38 Billion in Hack Losses

Lunde’s estimate excludes Binance’s results for 2026 and all years before 2021. For context, the U.S. Department of Justice said that between August 2017 and October 2022, U.S. users alone generated more than $1.6 billion in profit for Binance. In its nine years of existence, Binance has never published consolidated financial statements covering the entire group.

However, information about fines and hacks is more transparent. In 2023, Binance agreed to pay $4.32 billion as part of a U.S. criminal settlement. Its co-founder, Changpeng Zhao (CZ), stepped down as CEO under the deal and later spent a few months in a U.S. prison. According to Bitcoin.com News calculations, Binance’s local units have received around $20 million in fines in other countries. These range from a $6.9 million penalty in Australia this year to a $750,000 fine in Turkey in 2021, bringing the total in known fines to around $4.34 billion.

Meanwhile, in addition to the $6.34 billion Binance set aside following this October’s hack, the exchange lost 7,000 BTC, worth around $41 million at the time, in a 2019 hack. Binance covered that loss through its SAFU emergency fund. Together, the two hacks involved around $6.38 billion in company funds, though as noted, the company will be able to claw back a substantial portion of frozen funds from stablecoin issuers and other exchanges.

Combined with the fines, the exchange’s “cost of doing business” now stands at around $10.7 billion. If Lunde’s estimate is correct, then this equals around 56% of Binance’s pre-tax profits for 2021–2025. Depending on Binance’s results for 2026 and the years before 2021, fines and hack-related costs could account for around half of its lifetime profits.

Bifinity Paid $124 Million in Taxes

Binance has not made its financial figures publicly available, so these calculations remain estimates. The same applies to the taxes the exchange pays. However, financial records from Bifinity, Binance’s fiat-to-crypto payments provider in Lithuania, offer some insight.

The company, which CZ owned directly from April 2023 to January 2025, operated in Lithuania from 2020 until it began winding down this year. According to public records, Bifinity generated almost €1.5 billion ($1.68billion) in revenue and earned almost €180 million ($202 million) in net profit after paying €110.8 million ($124 million) in taxes.

A Smaller War Chest Could Hinder Binance’s Expansion

The story is still developing, while Binance says it has already covered about 95% of the affected assets, and withdrawals have resumed and are stabilizing after an initial spike. Still, the crypto giant must now allocate resources to managing the crisis, which could hurt its expansion plans, especially with a potentially smaller investment war chest.

Also, as Bitcoin.com News reported, Binance’s tracked assets have fallen by more than 11% since the Oct. 29 hack, to around $128.3 billion. The decline also reflects falling crypto asset prices and the stolen funds. This is all happening at a time when competitors such as Coinbase, Kraken, and OKX are aggressively investing in expansion. What’s more, the market also appears closer to a bear phase than a confirmed bull run, potentially slowing Binance’s efforts to rebuild its reserves through future profits.

With no plans announced to publish financial statements and demonstrate the strength of its business, the market is now waiting for several developments: a more detailed incident report once the investigation is complete, an update on the more than $2.8 billion in frozen assets, information on when Binance will replenish the SAFU fund, and the results of its proof of reserves, due on Nov. 3.

Bitcoin.com News has reached out to Binance for comment and will update the article if the exchange responds.