CZ tells Musk to stop trolling over Binance hack, says $2 billion gap is manageable with $1 billion SpaceX stake

Binance founder Changpeng Zhao, known as CZ, asked Elon Musk on Friday to stop mocking the exchange’s security breach, then laid out “rough math” on how Binance could cover the damage. CZ said about $6.3 billion was hit, $3 billion is frozen and the remaining gap of roughly $2 billion is “manageable,” pointing to a SpaceX stake he says is worth more than $1 billion.

Binance hack sparks public disagreement between CZ and Elon Musk

The public disagreement began after CZ shared cybersecurity advice warning cryptocurrency users against clicking suspicious email links or downloading attachments, including those received from people they trust.

As reports of the Binance hack emerged, Musk responded to the discussion with fire and laughing emojis. His reactions attracted attention because they came while Binance was dealing with a major security incident and attempting to reassure its customers.

Musk also posted the phrase, “Everyday is Zeroday,” in a discussion surrounding the breach. His subsequent reactions prompted CZ to address him directly.

CZ expressed respect for Musk but argued that the timing of the jokes was inappropriate, given the scale of the financial damage and the uncertainty surrounding the incident.

In his response, CZ wrote: “Elon, have a lot of respect for you, but bad time to troll. Please stop.”

He also reminded Musk that Binance had participated in financing his 2022 acquisition of Twitter, which was subsequently rebranded as X. CZ said the investment had grown considerably in value and suggested that Musk should show some support during the difficult period.

The exchange quickly attracted attention across the crypto community, with investors discussing whether Musk’s reactions were appropriate given the circumstances.

The disagreement also highlighted how public confidence can become particularly sensitive when a major cryptocurrency exchange experiences a security crisis.

CZ explains Binance’s financial position after the $6.3 billion breach

Beyond the disagreement with Musk, CZ provided an explanation of how Binance could manage the financial consequences of the Binance hack.

According to his estimates, approximately $6.3 billion in assets had been affected by the incident. However, around $3 billion had reportedly been frozen through cooperation with other cryptocurrency companies and industry partners.

He also referenced Binance’s Secure Asset Fund for Users, commonly known as SAFU, which serves as an emergency reserve designed to protect customers in extraordinary circumstances.

CZ presented the figures as follows: “Rough math: $6.x b hack, $3b frozen, $1.x b SAFU fund. Gap is about $2b, we have $1.x billion in SPCX alone. Remaining gap is (still painful, but) manageable.”

His explanation placed the remaining financial shortfall at approximately $2 billion, although the figures were presented as rough estimates rather than a final audited accounting of the incident.

The Binance hack has therefore put considerable attention on the exchange’s ability to absorb unexpected losses without affecting customer balances or its wider operations.

Binance’s SpaceX investment becomes part of the recovery discussion

One of the more unexpected developments following the Binance hack was CZ’s reference to Binance’s investment exposure to SpaceX.

The investment originated from Binance’s reported $500 million contribution to Musk’s 2022 Twitter acquisition. Following subsequent corporate developments involving Musk’s businesses, the investment became associated with SpaceX shares.

CZ claimed that Binance’s SPCX holdings were now worth more than $1 billion, making the investment a potentially significant component of the company’s broader financial resources.

However, the valuation of an investment does not automatically mean that the funds are immediately available. Shareholder restrictions, lock-up arrangements, market conditions and liquidity considerations can affect when investors can sell their holdings.

CZ later clarified that his comments should not be interpreted as an announcement that Binance intended to liquidate its SpaceX holdings. Instead, he was highlighting the company’s available resources to demonstrate that the remaining financial exposure was manageable.

Binance co-CEO Yi He also addressed the issue, arguing that the company had sufficient revenue to absorb the losses without selling the investment.

What the Binance hack means for cryptocurrency investors

The incident has broader implications beyond the disagreement between CZ and Musk. It has once again highlighted the importance of security infrastructure, operational controls and financial transparency within the cryptocurrency industry.

The scale of the Binance hack has also renewed comparisons with previous cryptocurrency exchange failures, particularly the collapse of FTX in 2022.

However, a security breach and an exchange insolvency are different events, and investors should avoid treating the two situations as identical without examining the available financial evidence.

Another important development is the reported involvement of blockchain security firms and other industry participants in freezing affected assets.

Cooperation between exchanges, stablecoin issuers and blockchain analytics companies can play an important role in limiting the movement of stolen funds.

The exchange’s ability to demonstrate that customer assets remain protected will be particularly important in maintaining confidence.

The Binance hack also reinforces the importance of personal security practices. Investors should avoid suspicious links, verify website addresses before connecting wallets and use additional authentication measures wherever possible.

CZ’s disagreement with Musk may dominate social media discussions, but the more significant issue for the market is how Binance handles the financial and technical aftermath of the breach.