The news: Binance, the world's largest cryptocurrency exchange, lost $6.3 billion worth of funds in the biggest crypto security breach to date.

Binance said attackers submitted unauthorized withdrawal transactions after gaining access to its systems. 

As of writing, Binance has suspended withdrawals and pledged to cover customer losses using its emergency reserve fund and company resources.

Why it matters: Traditional banks have built customer trust over decades through regulatory oversight, established security practices, and deposit insurance. The Binance breach gives them an opportunity to reinforce those advantages and claw back funds from consumers who had defected to crypto assets.

And trust is an important factor when consumers change financial institutions. Thirty-nine percent of North American banking consumers cited greater trust in another bank as one of their top three reasons for selecting a different primary banking provider, per a Celent survey commissioned by Temenos. That matched the share citing better digital banking features and came close to the 42% citing higher savings rates.

Implications for banks: Banks can target likely crypto owners with marketing campaigns that highlight the safeguards in place to protect their assets, and the financial guidance available through their deposit, brokerage, and wealth management offerings. 

Banks can also encourage customers who hold assets across multiple financial platforms to consolidate more of their savings and investments with one institution, where they can access financial advice and a broader range of products. It’s important to highlight incentives for moving funds to one platform in that messaging.

But cyberattacks affect traditional financial institutions too, and deposit insurance doesn't protect against investment losses. Banks should clearly communicate which protections apply to different products and demonstrate how they safeguard customers' assets.