Ethena Proven Secure: $8.8M Binance Hit, $60M Safe Now

Counterparty risk returned to the spotlight in the crypto markets on October 29, after Binance announced it was investigating an apparent security breach that saw a large outflow of funds from the exchange’s hot wallets. Within a matter of hours, Ethena Labs clarified its exposure to backup collateral, telling traders of its stablecoin USDe that its backing assets remained out of the exchanges’ custody. As the debate around stablecoin collateral transparency has come to define all market liquidity, the statement showed how the design of custody structures boosts or reduces systemic risk.