Exchange Hack: What Happens to Active Trades?

[Dr.Bitcoin_Strange]

Since everything is on pause, your trade will also be on pause till the exchange resumes trading again, your trade continues and if the price is already against your position at that time of resuming, the exchange can roll back a fair price though, this varies from exchange to exchange.

However, if the exchange don't have SAFU, there will be no reimbursement and your funds is gone.

That might be true, every exchange could have different ways to handle this incident, and like you said, if the exchange doesn't have SAFU, there's no way they would be able to repay affected customers. But I was also thinking, what if the SAFU is not enough to settle all customers, that means some traders that lost a huge amount in cause of the halt of trading activity will not immediately get their funds. I even learned a new information this morning that Binance suspends trade on 30/102026, but I didn't see a full detail of whether it prevented only opening a new trade or prevent adjusting of already running trades.

[Nathrixxx]

In a case too where the exchange has to cancel the running orders of traders which could also cause lose, does the exchange compensate the trader in any way?.

I'm here to see an exchange compensating its traders for anything caused by it. Their users should be even luckier that the exchange does not shut down together with their assets on it. While for any outage experienced for a short time, I don't think the exchange will compensate them down to only continue as normal with them, the risk is too much that one does not still get compensated even though we are using a centralized exchange to trade and they ask for profit from us.

[RGBTC]

People will think that the problem is in the wallet and not the exchange though. As for the users information, I won't underestimate this and the hackers can also sell this to another company for a decent amount of money.

That is not the core of the OP’s question. All user activity must be synchronized in real-time with the actual financial state behind the scenes. The Binance hack involved the draining of hot wallets, not an issue with the platform's core functionality. In such a situation, the information presented to users no longer reflects the true state of affairs, the information being highlighted here is not personal data, but rather data generated by the users' own activities.

[boyptc]

That might be true, every exchange could have different ways to handle this incident, and like you said, if the exchange doesn't have SAFU, there's no way they would be able to repay affected customers. But I was also thinking, what if the SAFU is not enough to settle all customers, that means some traders that lost a huge amount in cause of the halt of trading activity will not immediately get their funds. I even learned a new information this morning that Binance suspends trade on 30/102026, but I didn't see a full detail of whether it prevented only opening a new trade or prevent adjusting of already running trades.

That is interesting when those real time trades happened at that time prior to that suspension of trade and all other exchange activities.

I think if it's for that, they have to see the back log for all users and if there's a potential roll back they have done it already. Since we haven't heard like that decision so, it means that everything has been back to normal.

And probably everything has been audited well for user's activities.

[Antotena]

I have not had such experience and hope not to but the too many exchange hacks that is happening lately just put this thought in my head. Assuming a trader is on a perpetual position and then the exchange got breached by hackers, which probably lead the exchange to suspend trading at the moment, making it impossible for the trader to close or adjust their position, who bears the lose if the trader lost that trade due to that incident? In a case too where the exchange has to cancel the running orders of traders which could also cause lose, does the exchange compensate the trader in any way?.

Everything you see one exchange are numbers, they aren't real coins. What you see on account balance, orders books and values on the exchange are just pure numbers record on the exchanges.The only way you can have access the main coin is when you withdraw and you must authorize it yourself.

If an exchange is hacked, it doesn't affect records because it's not going to be written on anyone's account that a coin was stolen from the exchange, rather it will come from the exchange hot wallet were they keep coins. The trading activities aren't going to be affected. The only thing I see that is going to be affected is if you trade is liquidated due to price movement, this is when I expect your trades to be affected.

I don't think the exchange is going to cancel your trade, it will affect their exchanges. The one thing I'm for sure will be affected is the withdrawals from the exchange.

[Crypto Library]

I have not had such experience and hope not to but the too many exchange hacks that is happening lately just put this thought in my head. Assuming a trader is on a perpetual position and then the exchange got breached by hackers, which probably lead the exchange to suspend trading at the moment, making it impossible for the trader to close or adjust their position, who bears the lose if the trader lost that trade due to that incident? In a case too where the exchange has to cancel the running orders of traders which could also cause lose, does the exchange compensate the trader in any way?.

As far as I know, Binance and several other exchanges provide their services on an AS AVAILABLE and AS IS basis, which means that you will get the service as long as the thing is available. If you face a loss due to hacking or any other crash, then the exchange authority will not take that responsibility and knowing this, we basically have to trade futures or spot trade.
So I don't think any compensation will be given to traders by the exchange, although I have never personally encountered such a situation, so I can't answer from real experience so far. And as far as I remember, compensation was paid in the case of the kucoin exchange in 2020, but it was not paid for losses incurred by futures trading.

[Davidvictorson]

However, if the exchange don't have SAFU, there will be no reimbursement and your funds is gone.

I wonder if there is any
1. exchange that do not have SAFU
2. wether traders check this before to sign up with exchanges

[logfiles]

You people ought to look at the terms of service though. Mostly that section of Limitation of Liability or something like that. The exchange can easily refuse to compensate the users citing their terms of service. On a good day, they can cover the user losses but it is no guarantee.


I just used AI to compile a table of the past notable incidents for information purposes and in most cases the they have tried to compensate the users using the insurance funds


Major exchange breaches & outages — who actually bore the losses

Incident	What happened	Who ended up bearing it
────────────────────	────────────────────────────────────	────────────────────────────────────────────────
Mt. Gox (2014)	~850k BTC stolen; withdrawals halted; bankruptcy	Users — became unsecured creditors. Early payments ~15%; civil rehabilitation (rolling out 2024–25) pays ~90% of claims valued at 2014 prices (~$483/BTC) — a small fraction of actual value
────────────────────	────────────────────────────────────	────────────────────────────────────────────────
Bitfinex (2016)	119,756 BTC (~$72M) stolen; platform frozen ~1 week	Socialized onto all users first — every account cut 36.067%; BFX tokens ($1 per dollar lost) issued as IOUs. Fully redeemed by April 2017 (or converted to iFinex equity), so users were eventually made whole — funded by the exchange/investors, not a contractual right
────────────────────	────────────────────────────────────	────────────────────────────────────────────────
Binance (2019)	7,000 BTC stolen; withdrawals frozen ~1 week, trading stayed live	Binance, via SAFU (its emergency insurance fund) — users made whole
────────────────────	────────────────────────────────────	────────────────────────────────────────────────
KuCoin (2020)	~$275–300M stolen; withdrawals suspended ~2 weeks	KuCoin, via insurance fund + treasury — users made whole, withdrawals resumed in stages
────────────────────	────────────────────────────────────	────────────────────────────────────────────────
Bybit (Feb 2025)	~$1.5B ETH stolen from cold wallet (compromised Safe{Wallet} UI)	Bybit's own balance sheet — trading never suspended; bridge loans (incl. from Bitget) taken and stolen ETH swapped 1:1. Customers whole
────────────────────	────────────────────────────────────	────────────────────────────────────────────────
FTX (2022)	Insolvency (not a hack); trading and withdrawals frozen mid-collapse	Users, as unsecured creditors — distributions (2024–25) ≈ 118–119% of petition-date claim value, far below real value
────────────────────	────────────────────────────────────	────────────────────────────────────────────────
Binance (Oct 10–11, 2025)	Record liquidation cascade; Binance's "Accounting price" for collateral like USDe anomalously de-pegged on-platform, triggering mass arguably-wrongful liquidations	Binance paid ~$283M to affected users — discretionary goodwill, because its own price handling caused it. Not a legal obligation
────────────────────	────────────────────────────────────	────────────────────────────────────────────────
Bybit (Oct 10–11, 2025)	XPL perp printed abnormal prices on thin liquidity; brief halt; abnormal liquidations	Bybit announced ~$30M compensation program — again goodwill
────────────────────	────────────────────────────────────	────────────────────────────────────────────────
BitMEX (2019)	Abnormal print on its Kraken-sourced index flash-liquidated traders	BitMEX reviewed claims and reimbursed affected liquidations — goodwill, exchange-side error
────────────────────	────────────────────────────────────	────────────────────────────────────────────────
Kraken (Feb 2021)	Outage during violent volatility; margin traders trapped in positions	Kraken offered partial compensation via account credits — goodwill
────────────────────	────────────────────────────────────	────────────────────────────────────────────────
Binance (May 19, 2021)	Engine outage during a crash; users couldn't close positions	No general compensation — the cleanest precedent that "trapped during downtime" losses sit with the trader
────────────────────	────────────────────────────────────	────────────────────────────────────────────────
OKEx/OKX (2018)	BTC quarterly futures flashed to ~$485; OKX rolled back "abnormal" trades	Other users bore it — OKX clawed back (socialized) profits from winning traders to cover bankrupt positions; US litigation followed

[Nothingtodo]

I have not had such experience and hope not to but the too many exchange hacks that is happening lately just put this thought in my head. Assuming a trader is on a perpetual position and then the exchange got breached by hackers, which probably lead the exchange to suspend trading at the moment, making it impossible for the trader to close or adjust their position, who bears the lose if the trader lost that trade due to that incident? In a case too where the exchange has to cancel the running orders of traders which could also cause lose, does the exchange compensate the trader in any way?.

Like you, I have not had such an experience yet, but it is a matter of tension overall. For example, you did a futures trade and you took a long position when the market was long, but unfortunately due to such a bad situation in the market, the market went short. That is, if you cannot cancel the dollars in your futures trading order and the exchange shuts down all operations, then who will be responsible for my massive liquidation?

[serjent05]

I have not had such experience and hope not to but the too many exchange hacks that is happening lately just put this thought in my head. Assuming a trader is on a perpetual position and then the exchange got breached by hackers, which probably lead the exchange to suspend trading at the moment, making it impossible for the trader to close or adjust their position, who bears the lose if the trader lost that trade due to that incident?
In a case too where the exchange has to cancel the running orders of traders which could also cause lose, does the exchange compensate the trader in any way?.

Didn't the exchange stop the trade activity once they suspend trading?  So basically, all positions are cancelled.  This only means that the trader won't execute any sales or adjustments, traders can miss the opportunity, but they won't lose their asset (assuming that funds are not stolen/reimbursed by the exchange).

I believe no one is to be responsible for this because it was a security measure protocol.  It is up to the exchange whether they want to compensate their users of missed opportunity after suspending the trading activity due to a hacking event, but they have no responsibility for trading losses (missed opportunity) during the trade suspension after a hack incident if it is not written in the TOS.  It is said that the exchange is not legally responsible if they stop trading activity after a hack until the vulnerabilities are fixed. The action is to protect the users' assets from possible exploitation, so the action can be seen as justified.

[decodx]

Like you, I have not had such an experience yet, but it is a matter of tension overall. For example, you did a futures trade and you took a long position when the market was long, but unfortunately due to such a bad situation in the market, the market went short. That is, if you cannot cancel the dollars in your futures trading order and the exchange shuts down all operations, then who will be responsible for my massive liquidation?

No one will be held responsible - in other words, you accept all the risk. This is what you have to agree with before signing up for their trading services.

Most of these standard clauses specifically try to void all responsibility for anything indirect or consequential. That means they don't assume liability for things that include your profit losses as well as unforeseen liquidations due to slippage or even opportunities lost because of security pauses or emergency halts.

[avp2306]

Like you, I have not had such an experience yet, but it is a matter of tension overall. For example, you did a futures trade and you took a long position when the market was long, but unfortunately due to such a bad situation in the market, the market went short. That is, if you cannot cancel the dollars in your futures trading order and the exchange shuts down all operations, then who will be responsible for my massive liquidation?

No one will be held responsible - in other words, you accept all the risk. This is what you have to agree with before signing up for their trading services.

Most of these standard clauses specifically try to void all responsibility for anything indirect or consequential. That means they don't assume liability for things that include your profit losses as well as unforeseen liquidations due to slippage or even opportunities lost because of security pauses or emergency halts.

They cannot blame the exchange for that situation, because they are probably don't want that situation to happen.

Also traders should accept their losses if same like situation occur, because nobody wants to experience hacking. Then losing from bad market movement is part of consequences on trading.

That's why I find doing long term futures trade risky. Because this situation can possibly liquidate their position instantly, particularly if there's big issues disturb the market..

[drangos]

I believe it is dependent on why the loss occurred and on the exchange's TOS. Note that a hack does not mean that all active positions are cancelled. Nor does it give traders a right to be compensated. The exchange can restore positions. Resolve through a reference price. Or provide compensation following an investigation of the incident. However there are no hard. And fast guidelines that ensure this. So I feel traders should find out how an exchange is covered if there is insurance. And what are their emergency settlement policies before trading with leverage. Security on an exchange is important and so is how their exchanges treat their customers when things go wrong.

[M47AK16]

Like you, I have not had such an experience yet, but it is a matter of tension overall. For example, you did a futures trade and you took a long position when the market was long, but unfortunately due to such a bad situation in the market, the market went short. That is, if you cannot cancel the dollars in your futures trading order and the exchange shuts down all operations, then who will be responsible for my massive liquidation?

No one will be held responsible - in other words, you accept all the risk. This is what you have to agree with before signing up for their trading services.

Most of these standard clauses specifically try to void all responsibility for anything indirect or consequential. That means they don't assume liability for things that include your profit losses as well as unforeseen liquidations due to slippage or even opportunities lost because of security pauses or emergency halts.

Right, this is clearly mentioned in their terms of services so no one will be held accountable but us. In any situation like this, we have to accept the loss. Luckily, a few exchanges are safeguarded and they have return user funds even in terms of a security breach. Exchange like Binance will return the user funds in few intervals but that still locks us out of our funds for quite some time and in trading, every single opportunity missed is a loss.

We have to take precautionary measures to be prone to these situations. One healthy habit for me is to withdraw regular profits and only risk my actual capital.

[Kelward]

But if it happened like this and it is getting more than minutes to hours and the exchange is not back online, just know that it is possible the exchange may not be able to pay users and they may shot down operation.

If the exchange suffers a really significant loss, I don't think they will be very willing to pay users who had active trades on during the security breach. It will be a loss that everyone will have to bear.

High chances that it can be more common with small exchanges.

I know for sure that if there is a breach on an exchange their first reaction would be to shutdown their services until normalcy is restored which was what happened with the recent exchanges that were hacked, when they shutdown it automatically means that every active trades are suspended. As for compensations it would depend on the magnitude of the funds that was stolen during the hack and the capacity of the exchange to compensate active traders who had suffered loses. In situation of hacks loses are imminent for the exchange, they can only compensate what they can, if they cannot the active traders also have to share in the lose.

[Hamza2424]

Binance, when hacked, did not suspend its services for traders. They only suspended withdrawals because they needed time to assess if hackers still had access to the wallets or not. So, to avoid further unauthorized withdrawals, they suspended withdrawals only.

Although deposits were also affected for a very short time, spot and futures trading were not suspended, although they temporarily suspended their Alpha trading, if you know what that is.

But after Binance, when CoinDCX got hacked, they restricted leveraged futures trading and placed futures in reduce only mode, meaning we can close or reduce existing trades, but can't open new ones or increase the positions in existing ones. So that means the ones that were opened before the disruption can have to face consequences, and it's not necessary that the exchange will compensate.

Remember last year's October black swan event, and due to liquidity issues and other technical issues, Binance liquidated many trades who lost millions. When it said it would recover the funds and reimburse the eligible ones, instead they gave them a few dollars. So the loss is not entirely on Binance. You, as a trader, have to face the consequences too. Therefore, be wise when choosing an exchange.