Exchange Hack: What Happens to Active Trades?

[Ojima-ojo]

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?.

In such situations, the exchange have just two choices and will go along with the one the best protect the traders funds and also protect the integrity and security of the exchange itself.


Exchange will close all active orders and settle the trade at the current price.
Secondly is either the exchange close withdraw halt the trade at the timestamp and price stamp holding it untill everything resume back and the trade continue running.

[GbitG]

Well, at 25 October 2025 when Bitcoin suddenly crashed then this type of case was happened to me..... Like I buy BTC few minutes before the crash and even price was too near to hit my TP but suddenly it's got twisted and even my SL was at Break even point but still it's hit my SL and after that I try another position in few minutes and I was in hurry to put a SL but Binance didn't allow me to put the like continuously they are showing me a "Submission failed" error and even at last I try to close my tarde manually then still they were showing me the same error.......

However ever since that day til now I haven't trade on Binance. I actually transfer funds from Binance to MEXC because of this F**king scams.

[yhiaali3]

Fortunately, I have not encountered this situation before, but I think it varies depending on the exchanges, the extent of the breach, the amount of money stolen from the exchange, and whether it is able to bear the responsibility or not.

As in the Binance incident, they are certain that they will compensate everyone if they suffer a loss as a result of losing their positions. But in other exchanges, they may not have enough money to compensate those affected, whether from the hack or from losing their positions.

[Awaklara]

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?.

The exchange should be the one to bear the losses. In a situation where the exchange is going to halt all activities, they have all the data of users who are currently opening trading positions. The exchange might use the last data before completely stopping operations. However, decisions like this may be outside the exchange's plan. So there is a possibility that the exchange will also take their own policies to manage users who are still opening trading positions when a hack forces the site to be temporarily shut down.

[henmark]

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?.

The exchange should be the one to bear the losses. In a situation where the exchange is going to halt all activities, they have all the data of users who are currently opening trading positions. The exchange might use the last data before completely stopping operations. However, decisions like this may be outside the exchange's plan. So there is a possibility that the exchange will also take their own policies to manage users who are still opening trading positions when a hack forces the site to be temporarily shut down.

The exchange already has to bear loss from the hack so I don't really think they can bear this loss as well. They would maybe try to close all orders at the timestamped price from the hack incident. This would at least save a few users from getting their positions liquidated. Exchange still has to return the stolen funds from their reserve so they will have to bear that loss. The chances of recovering those stolen funds is almost close to none.

In these cases, we as users can still get the actual capital held on the exchange at that time but the trades must be automatically closed in any such event. Even a few minutes of exchange being down can affect active traders.

[Freeveto]

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?.

I also have the same thought on how traders with already open positions before the exchange got hacked. I think they should be able to close their positions once they start to hear news on the exchange hacks before they suspend withdrawals. And I was thinking that even as the withdrawal and deposits were suspended, they would allow traders to close their positions to avoid losing since exchanges can't take the responsibility of the outcome of the trades. I think there will be a proper way to handle these traders by the exchanges since they know that their users open positions, to avoid losing their customers after the hack.

[Adiljutt156]

The exchange should be the one to bear the losses. In a situation where the exchange is going to halt all activities, they have all the data of users who are currently opening trading positions. The exchange might use the last data before completely stopping operations. However, decisions like this may be outside the exchange's plan. So there is a possibility that the exchange will also take their own policies to manage users who are still opening trading positions when a hack forces the site to be temporarily shut down.

In crypto exchanges it's never been easy for them to cover Binance without any doubt, one of the top exchanges that has enough sources and their assets to cover, but it's not easy for many others just because of this; it always depends.
If any exchange has enough, they surely cover it, but in case they do not have enough, they will share, or they will shut down their business and have no future because few exchanges already face issues like this, and now they are out of business.
Hacking has never been in any policy, but still it exists and has done damage, which is a big problem for exchanges and users. Just because of this, most things have never stayed on the same level.

[Awaklara]

Hacking has never been in any policy, but still it exists and has done damage, which is a big problem for exchanges and users. Just because of this, most things have never stayed on the same level.

Because hacks that cause losses for users and exchanges are also a risk for both. So they should already have policies listed in their terms and conditions so that the process is understood by users between the rights and obligations of users and exchanges in such situations. Large exchanges certainly have the ability to cover user losses. But regulators must consider that bad possibilities can happen to all exchanges.

[FinneysTrueVision]

The biggest hack in history, which was the one from Binance last month, didn’t affect trading on futures and perpetual markets. I imagine it would be similar on other exchanges. You can still adjust your positions and start new trades and if there happens to be a shortfall in their reserves everything will get reconciled at a later point.

I don’t think they want to be on the hook for everyone’s losses if they pause trading and people get liquidated. They can either settle every open position or allow everything to continue and come up with the funds later so they don’t force users to take losses.

Binance went with the least disruptive option and barring a total run on the bank, they have enough funds to keep the exchange operating without any issues for their futures traders.

[liasbaa]

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?.

If the exchange does not suspend active trading at that time, you can buy or sell and if you make a profit or loss during this time, you will profit or lose. If the exchange is closed while you are buying, your order will be automatically canceled. When it is open again, you will have to place a buy order. Binance has promised to return the funds of the hacked customers and I think they have already kept their promise.

[YOSHIE]

Exchange Hack: What Happens to Active Trades?

Yes, maybe our experience is the same, I have never experienced it either, but the incident that occurred on the Binance exchange a few days ago, has provided an understanding of the risks of active transactions, I'm sure what Binance is doing, maybe other exchanges are also doing it, where the Binance platform is taking emergency measures as they mentioned.

1. Suspension of Transactions and Withdrawals (Suspension)

Operational Cessation: Exchanges usually immediately freeze all forms of active transactions, including trading, deposits and withdrawals.

Time Restrictions: In cases like Binance, withdrawals and transactions are halted for up to 48 hours or longer to allow the security team time to investigate.

I think that's how exchanges do emergency responses to active transactions, when the exchange suffers a hack attack.